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Cryptocurrency firm SafeMoon filed for Chapter 7 bankruptcy in Utah on Thursday as its executives face criminal charges for allegedly using investor funds to enrich themselves. That means the firm intends to liquidate its assets and shutter operations to repay creditors.
SafeMoon’s SFM (SFM-USD) token, which has a small market value of $18.6M, plunged 48.1% (in late morning trading) following the news, according to CoinMarketCap data.
The filing in the Utah Bankruptcy Court showed that SafeMoon has $10M-$50M in estimated assets. It has estimated liabilities at a maximum of $500K, with 50-99 creditors
Other crypto companies like crypto exchange FTX have filed for Chapter 11 bankruptcy protection, which, unlike Chapter 7, allows the debtor to restructure and eventually relaunch.
Last month, the U.S. Department of Justice and Securities and Exchange Commission filed a lawsuit against SafeMoon’s three founders, accusing them of misappropriating millions of dollars in investors funds and lying to customers.
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