The token of decentralized finance protocol SafeMoon (SFM) has fallen 31% in 5 hours after the corporate filed for chapter.
Safemoon formally utilized for Chapter 7 chapter, also called “liquidation chapter,” in a Dec. 14 filing to the US Chapter Court docket within the District of Utah. The voluntary petition was filed by lawyer Mark Rose, with Chief Decide Joel T. Marker assigned to the case.
A screenshot of a letter to workers purportedly written by the agency’s chief restructuring officer surfaced on Reddit, explaining that its chapter run was why it was now not capable of pay worker wages previous to the submitting.
“You will have to file a declare within the chapter courtroom in your unpaid wages,” the doc learn.
The most recent blow comes solely a month after the US securities regulator charged SafeMoon, its founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith in November for violating securities laws in what the regulator described as “a large fraudulent scheme.”
The cryptocurrency fell from $0.000065 on Dec. 14 at 8:24pm UTC to $0.000045 over a five-hour interval after the information, according to CoinGecko. It did, nonetheless rebounded again to $0.000061 in a rapid-fire 10 minute span.
SMF fell 31% instantly following the chapter submitting earlier than regaining barely. SFM is at present altering palms for $0.00005729. The token is down 98.2% from its highest worth of $0.0033 on Jan. 5, 2022, and its as soon as $1 billion market cap has now tumbled to $34.5 million.
A number of former SafeMoon supporters expressed frustration on Reddit in reflection of the chapter, alleging they had been rug-pulled by the SafeMoon builders.
“The actual fact of the matter is, everybody has been scammed by the SafeMoon builders, together with the mods that supported and trusted SafeMoon,” said Reddit consumer Jtenka.
One other Reddit consumer, “anonyamon42069,” said: “By no means wanna even speak about how dangerous all of us bought scammed and particularly the cash I misplaced. To the idiots that also suppose SafeMoon has an opportunity and can ‘go to the moon’: search assist.”
Santiago Melgarejo, a former nonfungible token analyst and gross sales specialist for SafeMoon, mentioned in reflection that the “warning indicators had been there” all alongside, notably when lots of the workers had been abruptly fired regardless of a lot of them working a month with out pay.
Just lately discovered about SafeMoon’s chapter submitting, and my ideas are with my ex-colleagues who’ve been unpaid for a month, and the holders dealing with frustration and anger.
Reflecting again, the warning indicators had been there – notably, when many people had been abruptly fired over a number of…
— Santi (@Santi_NFT) December 14, 2023
SafeMoon was additionally exploited in March, leading to a web lack of $8.9 million.