SafeMoon (SFM), the once-thriving decentralized finance (DeFi) digital currency, has filed for Chapter 7 bankruptcy in the United States. This willingness to voluntarily liquidate its holdings comes amid a crackdown on the platform by the United States Securities and Exchange Commission (SEC) some weeks back.
This bankruptcy was filed in the United States Bankruptcy Court for the District of Utah, and SafeMoon's goal is to retain exempt properties while receiving a discharge of as many debts as possible. The filing places the crypto project on par with other major crypto firms that have applied for bankruptcy over the past year.
As expected, the price of SafeMoon is in freefall following the bankruptcy filing, but there is a twist in its on-chain performance that proves the bizarre nature of cryptocurrencies. The coin plummeted by 48% at the time of writing to $0.00003309. The trading volume has shockingly rocketed by 181% to $232,845.49 in the wake of the panic sell-offs hitting the protocol.
Once a key component of BitMart and the Axie Infinity gaming ecosystem, SafeMoon has since lost its luster, with the current event finally plotting the demise of the token.
Downsides of meme coins
It is not news that the digital currency ecosystem is very volatile terrain, and many have predicted how especially unsafe meme coins are. The way SafeMoon is ending its journey is proof that not all that glitters at the beginning is gold.
At its peak, SafeMoon had relatable utility but was not ultimately immune to a regulatory crackdown. With the token at its lowest point, it sent fear to other HODLers of top meme coins like Shiba Inu (SHIB) and Floki.
Though these alternatives are more established with mega market capitalizations, the need to look beyond their present offerings might help more traders manage their risks appropriately.