Crypto Tycoon Warned of Scam in 2021

Once celebrated for its rapid rise, the decentralized finance protocol SafeMoon is now in dire straits. This is because it formally initiated Chapter 7 bankruptcy protection. Accusations of misleading investors and a colossal $200 million SEC lawsuit for securities fraud compound the challenges faced by founders Kyle Nagy, Thomas Smith, and Braden Karony. The tumultuous phase for SafeMoon, characterized by allegations of deception and manipulation, has led to a 31% nosedive in the value of its native token within a mere five hours.

Cautions from Hex Coin Founder

In the midst of SafeMoon’s downfall, echoes of earlier warnings from influential figures in the cryptocurrency sphere resonate. In 2021, Richard Heart, the mind behind Hex Coin, expressed skepticism about SafeMoon. He drew parallels to the infamous Ponzi scheme Powh Coin, which folded in 2018 after exploiting investors. Heart highlighted significant similarities in the business models of SafeMoon and Powh Coin. It specifically points out the imposition of a fixed 10% transaction fee. The subsequent redistribution of collected fees among existing token holders is also highlighted.

Heart’s warning was explicit and resolute. He unequivocally stated that any cryptocurrency enforcing a 10% transaction fee is not legitimate but rather indicative of a Ponzi scheme. Responding directly to a Twitter inquiry about SafeMoon being a scam, Heart replied succinctly with a “Yes.” He urged investors to exercise caution, emphasizing the glaring resemblance between SafeMoon and Powh Coin.


Also Read: SafeMoon Files For Chapter 7 Bankruptcy

SEC Lawsuit and Industry Ramifications

The SEC’s legal pursuit of SafeMoon and its leadership has reverberated through the cryptocurrency community. It underscores the pressing need for heightened regulatory scrutiny within the industry. The substantial dip in SafeMoon’s market value, coupled with allegations of fraudulent behavior, has significantly eroded trust in what was once a prominently featured decentralized finance project. Heart’s advice to Ponzi schemes underscores the pivotal importance of meticulous research for investors navigating the ever-evolving crypto landscape.

As the SafeMoon saga unfolds, it serves as a prominent reminder for regulators and investors alike to approach the cryptocurrency market with increased caution and thorough due diligence. The rapid evolution of the industry necessitates a proactive stance against fraudulent schemes. It ensures the credibility and endurance of decentralized finance projects. SafeMoon’s downfall and the timely warnings from figures like Heart shed light on the intricate complexities and inherent risks in the crypto space. This underscores the collective responsibility to foster transparency and accountability within the ecosystem.

Also Read: SafeMoon Exploit Funds Moved Via CEXs May Aid Law Enforcement

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