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DeFi meme coin SafeMoon's SFM token has crashed by 50% after the firm behind the project filed for Chapter 7 bankruptcy.
SFM is currently trading at $0.00003270, down 49.6% in the last 24 hours and marking an all-time low for the cryptocurrency, per data from CoinGecko.
SafeMoon US, LLC applied for Chapter 7 bankruptcy a in December 14 filing to the United States Bankruptcy Court for the District of Utah, made by attorney Mark Rose. The filing shows that the firm has an estimated 50-99 creditors, with estimated assets of between $10,000,001 and $50 million and estimated liabilities in the range of $100,001 to $500,000.
A post in the r/safemoon subreddit purported to show a letter from the firm's chief restructuring officer, indicating that employees would need to file a claim in the bankruptcy case for unpaid wages.
The bankruptcy filing comes after the U.S. Department of Justice last month unsealed an indictment charging SafeMoon executives Braden John Karony, Kyle Nagy, and Thomas Smith with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering.
The trio "deliberately misled investors and diverted millions of dollars to fuel their greedy scheme," U.S. Attorney for the Eastern District of New York Breon Peace said, in a release accompanying the charges.
Karony and Smith were arrested, while Nagy remains at large. At the same time, the U.S. Securities and Exchange Commission (SEC) filed civil charges against SafeMoon and its executives, for "perpetrating a massive fraudulent scheme" through an unregistered sale of crypto securities.