Cryptocurrency company SafeMoon filed for Chapter 7 bankruptcy protection on December 14th. Executives of the company are facing criminal charges in the United States.
Safemoon, which is affiliated with a token of the same name, has between 50 and 99 creditors and assets between $10 million and $50 million, according to documents filed in Utah bankruptcy court. 7 billion yen (exchanged at 140 yen to the dollar), and debt is said to be between $100,000 and $500,000 (approximately 14 million yen to 70 million yen).
Under Chapter 7 bankruptcy, a debtor’s assets are liquidated to repay creditors. Unlike Chapter 11 bankruptcy filings filed by other crypto companies, there is no intention to restructure the company and start over.
SafeMoon executives said last month that CEO John Karony, CTO Thomas Smith and developer Kyle Nagy deceived customers and issued a number of charges. CEO Kaloney and CTO Smith were arrested by authorities on charges of conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering after allegedly misappropriating $1 million in investor assets. However, although Mr. Nagy has been charged, he has not yet been arrested.
The company also faces a lawsuit from the U.S. Securities and Exchange Commission (SEC) for alleged fraud and violations of securities laws.
Safemoon’s crypto asset SFM has plunged about 42% in the past 24 hours, but it is neither highly liquid nor has a particularly large market capitalization.
｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Original text: Crypto Firm SafeMoon Files for Chapter 7 Bankruptcy, SFM Plunges 42%