Prosecutors say SafeMoon executives lied to investors about having 'locked' liquidity and instead used the funds to buy luxury cars.
Two SafeMoon executives were arrested after prosecutors said they lied to investors about having 'locked' liquidity, when instead they allegedly used the funds to buy luxury cars and real estate.
"As fraudsters increasingly use digital assets to mislead investors and misappropriate funds, our Office will be at the forefront of pursuing them and their ill-gotten gains. We will continue our focus in the digital asset space and bring those who defraud investors in this area to justice," said U.S. Attorney for the Eastern District of New York Breon Peace.
"In reality, the defendants allegedly retained access to the SFM liquidity pools and they used that access to intentionally divert and misappropriate millions of dollars’ worth of tokens from the SFM liquidity pools for their personal benefit," prosecutors said. The SEC said SafeMoon tokens are securities because "purchasers invested money in a common enterprise and reasonably expected profits or returns derived from the entrepreneurial or managerial efforts of others, in this case, the defendants."
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