- Safemoon price has recovered modestly in the past few days.
- The company behind SFM token filed for bankruptcy protection last week.
- This rally mirrors that of troubled companies like Terra and FTX.
Safemoon (SFM) price jumped by over 35% in the past 24 hours even after the key events in the network. The token soared to $0.000071, its highest point since Thursday last week. It has risen by almost 60% from its all-time low.
Is it safe to buy SFM?
Safemoon price has been in the spotlight in the past few months as concerns about the ecosystem rose. In November, the Department of Justice (DoJ) charged its key executives like John Karony and Thomas Smith (CFO).
In its filing, the department said that the executives had taken advantage of the crypto rally to launch a full-scale scam operation. Instead of fulfilling the platform’s mandate, the team withdrew over $200 million and spent it in luxury items.
Some of the alleged crimes include wire fraud, conspiracy to commit securities fraud, securities violations, and others. If found guilty, the three charged executives face more than a decade in prison.
These executives joined a growing list of crypto executives accused of committing crimes in the United States. The SEC has already secured guilty conviction of Sam Bankman-Fried (SBF), who now faces decades in prison.
Read more: How to buy Safemoon.
It has also secured extradition authority for Do Kwon, the founder of Terra, which collapsed in 2022. Terra and its ecosystem’s crash led to over $40 billion in total losses to global investors.
The SEC has also secured a guilty plea by Changpeng Zhao, the founder of Binance, who will be sentenced in 2024. Analysts see him serving some time in jail.
The other important Safemoon news was that the company filed for bankruptcy last week as legal challenges grew. In a statement, the firm said that it had between 50 and 99 creditors and had between $10 million and $50 million in assets. It also owes between $100k and $500k to these creditors.
Safemoon’s SFM price rise after these events is not new. In the past, we have seen tokens of bankrupt entities like Terra, FTX, and Anchor Protocol (ANC) jump. Safemoon still supports a market cap of over $35 million.
Is it safe to buy Safemoon?
Safemoon has always been a risky cryptocurrency to invest in because of the ever-broken promises by the team. Therefore, in a market with over 2 million cryptocurrencies, I believe that you can find other solid tokens like Bitcoin, Litecoin, and Ethereum.
Turning to the daily chart, we see that the token formed a bearish flag pattern, which is usually a bearish sign. Therefore, I suspect that Safemoon will continue falling as sellers target the key psychological level at $0.000040.
