Maybe not so safe… At its 2021 peak, the memecoin SafeMoon (which told investors that its price would go “safely to the moon”) had a $5.7B market cap. This week the SEC alleged that SafeMoon’s founder and two of its C-suite execs had been running a “fraudulent scheme.” The regulator said they wash-traded coins to make the token appear more popular than it was, and tried to prop up its price with bulk buys. The Justice Department arrested SafeMoon’s CEO and CTO (the founder couldn’t be… found) and charged all three with fraud and money laundering.
Back to Earth: SafeMoon’s price blasted up 55,000% in the spring of 2021, but the highs were short-lived.
Lunar luxury: The SEC says the three execs took extravagant vacays and bought pricey real estate and sports cars (McClarens, not Lambos) with their gains.
Blow the whistle… The charges come after lawmakers and regulators promised to step up enforcement in an industry thawing out from crypto winter. They’re getting help: this week, the Commodity Futures Trading Commission said that it received a record # of whistleblower reports this fiscal year, and that a “majority” of those reports involved crypto. The tips ranged from allegations of pump-and-dump scams to rug pulls. FYI: whistleblowers can get 10 to 30% of any penalties collected as a reward.
The call’s coming from inside the house… The crypto industry has struggled to shed its “Wild West” reputation, but now lots of members are calling for reform. The industry is pushing legislators for crypto-friendly regulation, and practically cheered on Sam Bankman-Fried’s fraud trial. Its latest play toward respectability: scores of applications for spot bitcoin ETFs, which analysts say could drive institutional investment if approved.