Cryptocurrency industry has its fair share of bad actors, and the SEC implied that 2023 will be a nightmare year for them. From unregistered securities offerings to fraud cases, SEC’s enforcement division continues to pursue numerous crypto-related lawsuits. Just a few minutes ago, a new lawsuit was announced.
The Securities and Exchange Commission (SEC) has charged Kyle Nagy, the founder of SafeMoon, SafeMoon US LLC, and the company’s CEO John Karony and CTO Thomas Smith with the sale of unregistered securities. Additionally, fraud charges are also included. According to the SEC’s complaint, the Defendants raised $200 million in cryptocurrency by claiming they would send the token price “to the moon.”
David Hirsch, Chief of the SEC’s Cyber Unit and Asset Management Enforcement Division, stated:
“Decentralized finance claims to provide transparency and predictable outcomes, but unregistered offerings lack the disclosures and accountability required by law. This gray area attracts fraudsters like Kyle Nagy, who seek to enrich themselves with other people’s money.”
According to the SEC’s complaint:
“According to the SEC’s complaint, while marketing the SafeMoon Token, Nagy told investors that the funds were safely locked and could not be withdrawn from the liquidity pool. However, as alleged, a significant portion of the liquidity pool was never locked, and the Defendants misappropriated millions of dollars to purchase McLaren cars, extravagant trips, luxury homes, and other items.”
The SEC’s litigation process will be conducted under the supervision of James Connor and led by Dean M. Conway and Oren Gleich.