SEC Accuses SafeMoon of Unregistered Sales of Crypto
SEC accuses SafeMoon and its leaders of misusing investor funds, while critics question the agency's focus.
The U.S. Securities and Exchange Commission (SEC) has accused crypto company SafeMoon, along with its founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith of selling a crypto asset, SafeMoon, without proper registration. They allegedly promised big gains but withdrew over $200 million in crypto assets and misused investor funds.
The SEC's David Hirsch, in charge of the Crypto Assets and Cyber Unit, criticized the unregistered offerings for lacking transparency and accountability. He called Kyle Nagy a fraudster who enriched himself at others' expense.
Nagy assured investors that their funds were safe, but it's claimed that a large part of the liquidity pool funds was never locked, and the defendants spent the money on luxury items.
SafeMoon reached a market cap of over $5.7 billion but lost 50% of its value when investors discovered the unlocked liquidity pools. Karony and Smith were also accused of trying to manipulate the market with misappropriated assets.
Critics argue the SEC should focus on cases like SafeMoon rather than pursuing actions against legitimate projects like Coinbase.
