Market News
Crypto Token SafeMoon Founders Spent Investor Cash on Sports Cars, US Claims - BLOOMBERG
BY , Bloomberg News
(Bloomberg) -- The people behind the crypto token SafeMoon — which once boasted a 19,000% price gain amid a 2021 crypto frenzy — were accused by federal prosecutors Wednesday of using millions of dollars of investors funds to buy luxury homes and McClaren sports cars.
The US Department of Justice and Securities and Exchange Commission sued the founders of the the crypto token SafeMoon in federal court in Brooklyn, alleging that they defrauded investors in the once-popular token. Prosecutors said that they diverted and misappropriated millions of dollars’ worth of SafeMoon.
Lawyers for the defendants — Thomas Smith, Kyle Nagy, and Braden Karony — did not immediately reply to a request for comment on the suits.
SafeMoon was a major beneficiary of the cryptomania of 2021. The token was created by Karony and two of his fellow developers from TANO, a Provo, Utah-based video game studio with a bare-bones website. It launched with a giveaway of 100 billion tokens (then trading for less than $0.00000001 each) for “lucky winners” who followed @safemoon, liked and retweeted then tagged three friends.
Read More: Crypto SafeMoon’s Rules to Tamp Down Selling Raise Red Flags
On Wednesday, Karony was arrested in Utah, and Smith was arrested in New Hampshire, according to the office of the US Attorney for the Eastern District of New York. Nagy remains at large, the office said.
“Instead of rewarding their clients as promised, their insatiable greed led them to spend millions of dollars on their own lavish desires,” Ivan Arvelo, a US Department of Homeland Security agent involved in the investigation, said in a statement. “Today, no luxury vehicles or sprawling real estate can protect them from the consequences of such crimes.”
(Updates with case details throughout)
