SEC claimed they used the proceeds to purchase luxury homes, invest in unrelated companies, buy McLaren cars, and pay for extravagant travel. Nagy and his team didn’t hold up their part of the bargain and continued to raid the liquidity pools for personal use. When confronted by investors, they changed the narrative and claimed they could access the money and rug pull, but they promised to be honest and disclose it before they did. Most critically, he had claimed that neither he nor the other developers could access the investors’ funds in the liquidity pool. However, in April, news got out that Nagy had misrepresented critical facts about the project. SEC claims that over 2.8 million wallet addresses have held the token since its launch. The market capitalization, at its peak, was $5.7 billion despite the project having no utility. SafeMoon was an instant hit at a time when any ‘crypto’ project that promised massive returns attracted millions of investors.īetween March 12 and April 20, 2021, the token’s price shot a staggering 55,000%.

Nagy launched SafeMoon in March 2021 with the promise that he would “drive the price to stratospheric all-time highs” or “Safely to the Moon.” The project’s marketing materials touted it to be a “self-regenerating automatic liquidity providing protocol” that rewarded holders and punished sellers. Securities and Exchange Commission November 1, 2023 Today we charged SafeMoon LLC, its creator Kyle Nagy, SafeMoon US LLC, and the companies’ CEO, John Karony, and Chief Technology Officer, Thomas Smith, for perpetrating a massive fraudulent scheme through the unregistered sale of the crypto asset security, SafeMoon. Securities and Exchange Commission (SEC) accused SafeMoon creator Kyle Nagy, CEO John Karony, and CTO Thomas Smith of misappropriating over $200 million in investor funds for their personal use. In a complaint filed in the Eastern District of New York, the U.S. SafeMoon and three of its executives are facing charges over their involvement in the alleged orchestration of one of the largest ‘crypto’ scams in the market.

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