SafeMoon SFM token drops 6% following $11 million liquidity drain SafeMoon SFM token drops 6% following $11 million liquidity drain
Observers have questioned the potential connections between the transactions and SafeMoon's ongoing bankruptcy proceedings.
2 min read
Updated: Feb. 12, 2024 at 1:03 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
More than $11 million worth of digital assets were removed as liquidity from various pools of the controversial crypto project SafeMoon, according to blockchain security firm Cyvers Alert.
Following the news, SafeMoon’s SFM token fell 6% to $0.00003134 as of press time, according to CryptoSlate’s data.
Liquidity removed
In a Feb. 12 post on social media platform X (formerly Twitter), Cyvers Alert stated that it detected an unusual transaction linked to Safemoon. The transaction involved the movement of liquidity from various pools, facilitated by a newly established address labeled as an “approveLiquidityPartner.”
This address executed approximately $11.2 million in transfers, encompassing assets from several blockchain networks, including Ethereum, Binance Smart Chain, and Polygon. Notable assets involved in these transfers include USDC, USDT, Shiba Inu, LINK, Wrapped BTC, and Pepe, as evidenced by on-chain data.
The address holds $1.6 million in digital assets, including Wrapped BTC, USDT, Pepe, Chainlink, and others.
Cyvers Alert questioned the potential connections between these transactions and SafeMoon’s ongoing bankruptcy proceedings.
Bankruptcy update
Last year, SafeMoon filed for bankruptcy protection in the US Bankruptcy Court in Utah. The filing revealed that the company’s liabilities could be worth as much as $500,000, while its assets were valued at more than $10 million.
Earlier this year, the company said it would decommission its SafeMoon Wallet at an undisclosed date.
“In order to insure you will still be able to access any wallets that you have loaded in the application, please secure your Recovery Phrases and/or Private Keys as soon as possible,” it added.
Safemoon faced a series of controversies leading up to its bankruptcy filing, significantly contributing to a decline in its market value. In March 2023, the project encountered a $9 million exploit, resulting in the depletion of its liquidity pool.
Furthermore, in November 2023, the US Securities and Exchange Commission (SEC) levied allegations of fund misappropriation against senior Safemoon executives, accusing them of diverting over $200 million for personal use. Subsequently, CEO John Karony and Chief Technology Officer Thomas Smith were arrested for these allegations.
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Posted In: Bankruptcy, DeFi
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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