SafeMoon founders Braden John Karony, Kyle Nagy, and Thomas Smith have been arrested and charged with securities fraud, wire fraud, and money laundering.
The charges stem from their alleged misuse of millions in investor funds for personal luxuries, according to a federal indictment that was unsealed earlier this Wednesday.
Inside the fraud claims
According to the damning indictment, the SafeMoon trio allegedly deceived investors about their operations. As the coin's market value rocketed to $8 billion, the founders are said to have pocketed millions of dollars for themselves.
The money was used to buy things like luxury cars and homes in various states.
Karony and Smith are now in custody, but Nagy remains at large.
U.S. Attorney Breon Peace spoke out on the matter, crediting agencies of the likes of the FBI and the SEC for their collaboration. The IRS was also spotlighted for its role in tracking down the alleged misused funds. "We will continue our focus in the digital asset space and bring those who defraud investors in this area to justice," he said.
SafeMoon's rise and fall
Launched in March 2021, SafeMoon stood out with its 10% transaction tax feature. Half of this tax was redistributed to SafeMoon holders, and the other half went toward the coin's growth. Rapidly, SafeMoon amassed over a million users, hitting an $8 billion valuation.
Its meteoric rise was also fueled by high-profile celebrity endorsements. Soulja Boy, Jake Paul, and Lil Yachty were among the public backers of SafeMoon.
However, these stars found themselves embroiled in a lawsuit that accused them of manipulating SafeMoon's price by misleading their fans.