Cryptocurrency firm SafeMoon has filed for bankruptcy as its executives face criminal charges in the United States.
SafeMoon, which is affiliated with a cryptocurrency of the same name, said it has between 50 and 99 creditors and about $50 million U.S. in assets.
The company has filed for bankruptcy protection from its creditors in the U.S. state of Utah.
SafeMoon has filed for a Chapter 7 bankruptcy, which results when a debtor’s assets are liquidated to repay creditors.
Unlike Chapter 11 bankruptcies there’s usually no intention to restructure and relaunch a company that files for Chapter 7 bankruptcy.
Several of SafeMoon’s executives were arrested by U.S. law enforcement officials in November on charges of securities fraud, wire fraud and money laundering.
The company’s chief executive officer (CEO) John Karony, chief technology officer (CTO) Thomas Smith and creator Kyle Nagy have been accused of misappropriating millions in investor assets.
The firm also faces a lawsuit alleging fraud and securities law violations from the U.S. Securities and Exchange Commission (SEC).
SafeMoon’s SFM cryptocurrency token plunged 42% over the last 24 hours on news of the bankruptcy filing. The SFM token now trades at a fraction of one cent.
