SafeMoon seeks Chapter 7 bankruptcy amid arrests and SEC allegations
DeFi protocol SafeMoon has applied for Chapter 7 bankruptcy protection following allegations of fraud by the U.S. securities authority. On Dec. 14, SafeMoon filed for Chapter 7 bankruptcy , commonly referred to as “liquidation bankruptcy ,” with the United States Bankruptcy Court in the District of Utah. The petition, filed voluntarily by attorney Mark Rose, has Chief Judge Joel T. Marker overseeing the proceedings. A document circulating on Reddit believed to be a letter from SafeMoon’s chief restructuring officer to its employees revealed the company’s inability to pay wages prior to the bankruptcy filing. This has led to the advice that employees file claims in bankruptcy court for their unpaid wages. In November, only a month before this setback, the United States securities regulator accused SafeMoon and its key figures, founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith, of securities law violations in an incident labeled as a “massive fra...