Unidentified Entity Alters SafeMoon Deployer Contract
On-chain tracking has flagged concerning activity surrounding SafeMoon’s deployer contract. According to a post by Cyvers Alerts, an unknown entity modified the contract, resulting in the withdrawal of $11.2 million in liquidity from various pools.
The entity’s actions, which include whitelisting an external address for withdrawal purposes, have raised suspicions about potential foul play. While the specifics of the entity remain undisclosed, the incident coincides with SafeMoon’s ongoing bankruptcy proceedings.
Unusual Liquidity Movements Detected
As per data from Etherscan, the entity has amassed over $1.6 million in various tokens, including Wrapped BTC (wBTC), Tether (USDT), and Pepe (PEPE). The extracted liquidity has been transferred to platforms like Ethereum, BNB Chain, and Polygon.
Cyvers Alerts highlights the abnormal nature of these movements, suggesting a deliberate effort to drain liquidity from SafeMoon’s ecosystem. However, the connection between these transactions and SafeMoon’s bankruptcy case remains unclear.
SafeMoon’s Bankruptcy Proceedings and SEC Allegations
In December 2023, SafeMoon filed for bankruptcy with the U.S. Bankruptcy Court in the District of Utah, following allegations from the U.S. Securities and Exchange Commission (SEC). The SEC accused SafeMoon and its executives of orchestrating a fraudulent scheme, manipulating market capitalization through deceptive practices.
Founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith faced accusations of wash trading, misleading marketing, and false statements regarding liquidity. While Karony and Smith have been apprehended, Nagy remains at large.
Market Reaction to the News
The revelation of the liquidity drain has impacted SafeMoon’s market performance. SafeMoon’s SFM token experienced an 8% decline, according to data from CoinMarketCap. Investors are closely monitoring developments amidst concerns over the project’s stability and regulatory scrutiny.
Despite the uncertainty surrounding SafeMoon’s future, the crypto community awaits official statements from the project regarding the recent liquidity drain and its implications for stakeholders.