Unexpected On-Chain Activity Raises Eyebrows

Recent on-chain data has set off alarms across the cryptocurrency community. An unexpected transaction of $11.2 million has been linked to a modified deployer contract of the beleaguered crypto project SafeMoon, which is currently undergoing bankruptcy proceedings. This alarming development was first reported by Cyvers Alerts, a prominent blockchain analytics firm.

Whitelisting an External Address: A Suspicious Move

According to the details divulged by Cyvers Alerts, an unidentified entity managed to whitelist an external address, paving the way for the withdrawal of significant liquidity from various pools. This move has cast a shadow of suspicion over the intentions behind the transaction and its possible connection to SafeMoon’s ongoing financial woes.

The Aftermath: Cryptocurrency Holdings and Market Impact

The entity in question currently possesses over $1.6 million in diverse tokens, including popular cryptocurrencies such as Wrapped BTC (wBTC), Tether (USDT), and Pepe (PEPE). The rest of the extracted liquidity has been strategically moved to other blockchains, namely Ethereum, BNB Chain, and Polygon. These transfers have been meticulously documented by Etherscan, the blockchain explorer.

In the wake of these events, SafeMoon’s native token, SFM, experienced a precipitous drop, declining by over 8% as reflected on CoinMarketCap.

A Timeline of Troubles for SafeMoon

The liquidity drain is the latest in a series of challenges for SafeMoon. The company initiated bankruptcy proceedings in mid-December 2023, filing with the U.S. Bankruptcy Court in the District of Utah. This filing followed closely on the heels of serious allegations by the U.S. Securities and Exchange Commission (SEC) against SafeMoon’s leadership, including founder Kyle Nagy, CEO John Karony, and CTO Thomas Smith.

The SEC has accused the executives of orchestrating a “massive fraudulent scheme” that involved wash trading, deceptive marketing, and false statements about liquidity lock-up periods, all aimed at inflating SafeMoon’s market capitalization to a staggering $5.7 billion. While Karony and Smith are currently in custody, Nagy’s whereabouts remain unknown.