The US Department of Justice claims that $200 million was secretly withdrawn from the project, which was spent on the purchase of sports cars, luxury homes and expensive travel.
The US Securities and Exchange Commission (SEC) and the US Department of Justice have charged the founders and team members of the SafeMoon cryptocurrency project with fraud and violation of securities laws.

Law enforcement arrested two project leaders—CEO John Caroni and CTO Thomas Smith. The founder of the project, Kyle Nagy, is still at large.

According to prosecutors, the project promised investors huge returns, but in fact, team members secretly withdrew $200 million from the project and spent the money on purchasing McLaren sports cars, luxury real estate and paying for expensive trips.

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At its peak, the SafeMoon (SFM) token had a capitalization of $5.7 billion, showing an increase of 55,000% from March 12 to April 20, 2021. However, soon the price of the token began to fall rapidly after investors discovered that most of the coins were in the hands of the project organizers.

The SEC said that the project team deceived investors by claiming that even the founders did not have access to the tokens. In addition, some project participants simulated high trading volumes of the SafeMoon token on exchanges in order to create a feeling of great interest from market participants.

In September 2023, the SEC announced that it was preparing new lawsuits against cryptocurrency companies and decentralized financial projects. This year, the regulator has already filed charges against Binance and Coinbase, and also fined the Kraken exchange $30 million. At the end of August, the SEC for the first time brought charges of illegal sale of non-fungible tokens (NFTs).