Overview
SafeMoon was once a shining name in the cryptocurrency frenzy of 2021, touted as a groundbreaking DeFi project with a profit-sharing model. However, that dream faded when CEO Braden Karony was convicted of fraud, money laundering, and securities fraud in the U.S. The incident not only led #Safemoon to bankruptcy but also shook confidence in DeFi projects. This article will detail the collapse of SafeMoon, from the scandal of its leadership team to the current state of the SFM token, while drawing lessons for investors in the crypto market.
SafeMoon and Empty Promises
In 2021, SafeMoon emerged as a phenomenon in the cryptocurrency market, attracting millions of investors with its unique tokenomics model. The project promised that each SFM transaction would incur a 10% fee, of which 5% would be redistributed to token holders and the remaining 5% would be locked in a liquidity pool to ensure stability. This model was marketed as a way for investors to 'earn passive income' and drive up the token's value.
However, the U.S. Department of Justice has uncovered the truth behind this promise. The liquidity pool that SafeMoon claimed to 'lock' is actually still under the control of the leadership team, including CEO Braden Karony. Instead of protecting investors, Karony and his accomplices withdrew millions of dollars from this pool for personal gain, from purchasing luxury real estate to high-end cars like the Audi R8 and Tesla.
The Million-Dollar Fraud Case
Braden Karony, CEO of SafeMoon, was found guilty by a federal court #USA on serious charges: securities fraud, wire fraud, and money laundering. According to prosecutor Joseph Nocella, Jr., SafeMoon is not at all 'safe' as its name suggests, but merely a sophisticated scam to deceive gullible investors. With these charges, Karony faces a maximum sentence of up to 45 years in prison.
The indictment reveals that Karony made over $9 million by manipulating the price of the SFM token. He and his accomplices executed numerous token buy-sell transactions at price peaks, using anonymous wallets and unverified accounts on exchanges to conceal their actions. These funds were used for extravagant purchases, including customized trucks, making tracing extremely difficult.
Among the accomplices, Thomas Smith has pleaded guilty and is awaiting sentencing, while Kyle Nagy, co-founder of SafeMoon, is still on the run. The investigation is being conducted by major agencies in the U.S., including the FBI, IRS, HSI, and SEC, highlighting the seriousness of the case.
Consequences and the Collapse of SafeMoon
After the scandal, SafeMoon declared bankruptcy in December 2023 and was taken over by VGX Foundation. From a praised DeFi project, SafeMoon quickly lost its luster. The price of the SFM token plummeted dramatically, with its current market capitalization only about $7.2 million (according to CoinMarketCap, as of May 22, 2025). The 24-hour trading volume of SFM even failed to reach $1 million, a minuscule figure compared to its peak in 2021.
In February 2025, SafeMoon announced its 'rebirth' as a memecoin on the Solana blockchain after burning most of the SFM token supply. However, the new project lacks a development team, has no clear roadmap, and only operates as a community-managed memecoin. This marks a shift from an ambitious DeFi project to a nearly meaningless name in the crypto market.
Lessons for Investors
The SafeMoon incident is a costly warning for investors in the cryptocurrency market. Here are some key points to keep in mind:
Conduct thorough research on the project: Do not invest solely based on promotions. Check the team, technology, and transparency of the project.
Be wary of 'too good to be true' models: Projects promising high returns without clear foundations often carry significant risks.
Prioritize reputable platforms: Keep track of information from reliable sources like Binance, CoinMarketCap, or CoinGecko to stay updated on trends and accurate pricing.
Current price of SFM token
According to CoinMarketCap (as of May 22, 2025), the market capitalization of SafeMoon (#SFM ) is now only about $7.2 million, with the price of each token significantly lower than during its peak. Investors should exercise caution when considering SFM, especially in the context of the project having lost its direction and existing only as a memecoin.
Risk Warning
Investing in cryptocurrency, including tokens like SFM, carries high risks due to significant price volatility and the risk of scams. The information in this article is for reference only and should not be considered investment advice. Please conduct thorough research (DYOR) before making any investment decisions.
