The Prosecutor's Office for the Eastern District of New York has filed charges against the founders and managers of the SafeMoon DeFi project in fraud for "millions of dollars".
Law enforcement officials claim that Braden Karony, Kyle Nagy and Thomas Smith deceived buyers of the SFM token issued on a public blockchain.
The defendants claimed that the asset in the liquidity pools was "blocked". Instead, when the capitalization of the project reached $8 billion, the defendants withdrew "tokens worth millions of dollars", which they spent on personal consumption, prosecutors say.
"They deliberately misled investors and diverted funds to fuel their fraudulent scheme and enrich themselves by purchasing a Porsche sports car, other luxury cars and real estate," said Prosecutor Breon Peace.
According to investigators, SafeMoon LLC launched SFM in March 2021. The smart contract provided for a transaction fee of 10% for the asset. Half of the commission was distributed among token holders, while the other half went to the liquidity pool, where it was allegedly blocked.
A few months later, the number of investors exceeded one million, and the capitalization reached $8 billion.
Law enforcement officers suggest that the defendants deliberately misled investors about "blocked tokens". The defendants not only withdrew funds from the pools, but also traded assets, manipulating the price in their favor.
They publicly denied that they owned and traded SFM, and concealed transactions through a complex routing system and anonymous exchange accounts, investigators believe. The defendants used the proceeds to buy luxury cars and real estate in New Hampshire, Utah and Florida.
"For example, Smith, using cryptocurrency addresses he controlled, sent 2,900 BNB worth more than $860,000, which was tracked by SFM's third-party liquidity pool, to purchase a Porsche 911 sports car and a non-fungible token," the press release said.
Caroni and Smith are arrested, but Nagy remains at large. Prosecutors stressed that until the court's decision, the defendants are considered innocent.
Recall that in March, the hacker withdrew assets worth approximately $9 million from the SafeMoon pool, but expressed a desire to return the funds.
Law enforcement officials claim that Braden Karony, Kyle Nagy and Thomas Smith deceived buyers of the SFM token issued on a public blockchain.
The defendants claimed that the asset in the liquidity pools was "blocked". Instead, when the capitalization of the project reached $8 billion, the defendants withdrew "tokens worth millions of dollars", which they spent on personal consumption, prosecutors say.
"They deliberately misled investors and diverted funds to fuel their fraudulent scheme and enrich themselves by purchasing a Porsche sports car, other luxury cars and real estate," said Prosecutor Breon Peace.
According to investigators, SafeMoon LLC launched SFM in March 2021. The smart contract provided for a transaction fee of 10% for the asset. Half of the commission was distributed among token holders, while the other half went to the liquidity pool, where it was allegedly blocked.
A few months later, the number of investors exceeded one million, and the capitalization reached $8 billion.
Law enforcement officers suggest that the defendants deliberately misled investors about "blocked tokens". The defendants not only withdrew funds from the pools, but also traded assets, manipulating the price in their favor.
They publicly denied that they owned and traded SFM, and concealed transactions through a complex routing system and anonymous exchange accounts, investigators believe. The defendants used the proceeds to buy luxury cars and real estate in New Hampshire, Utah and Florida.
"For example, Smith, using cryptocurrency addresses he controlled, sent 2,900 BNB worth more than $860,000, which was tracked by SFM's third-party liquidity pool, to purchase a Porsche 911 sports car and a non-fungible token," the press release said.
Caroni and Smith are arrested, but Nagy remains at large. Prosecutors stressed that until the court's decision, the defendants are considered innocent.
Recall that in March, the hacker withdrew assets worth approximately $9 million from the SafeMoon pool, but expressed a desire to return the funds.
