Bankruptcy Blues: SafeMoon Sees Sharp 50% Downturn in Short Time Span

Bankruptcy Blues: SafeMoon Sees Sharp 50% Downturn in Short Time Span

In the shocking turn of events, the value of SafeMoon, a token associated with a decentralized finance protocol, plummeted by 50% within a span of five hours following the announcement of the company's bankruptcy filing. 

SafeMoon initiated the bankruptcy proceedings by officially submitting a Chapter 7 petition, commonly referred to as "liquidation bankruptcy," to the United States Bankruptcy Court for the District of Utah on December 14. Attorney Mark Rose filed the voluntary petition, and Judge Joel Marker has been assigned to oversee the case.

As per an internal communication allegedly authored by the chief restructuring officer and leaked on Reddit, the company cited its bankruptcy proceedings as the reason for the inability to meet payroll obligations before formally filing for bankruptcy. The message also indicated that employees would have to file claims for unpaid wages in the bankruptcy court.

This development adds to the recent challenges faced by SafeMoon, coming just a month after the U.S. Securities and Exchange Commission (SEC) accused SafeMoon, founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith of violating securities laws in what the regulatory body characterized as a "massive fraudulent scheme."

Following this news, the SafeMoon (SFM) token witnessed a significant drop from $0.000065 to $0.000028 on December 15, as reported by Coinmarketcap. Presently, it is trading at around $0.000030, reflecting a 52% overnight decline.

SFM stands out as one of the most vulnerable tokens this week, experiencing a staggering 99.5% decrease from its peak value of $0.0033 on January 5, 2022. Its market capitalization, once valued at $1 billion, has now plummeted to $17.9 million.

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