SafeMoon is back in the spotlight following further allegations of double-dealing. However, the allegations are much more severe this time. YouTuber Coffeezilla, AKA Stephen Findeisen, accused SafeMoon’s founder, lead dev, and CEO of dipping into company funds in his latest exposé video.
SafeMoon’s founder is a man known only as Kyle, and very little is known about him beyond his online persona. Kyle allegedly copied the code of another smaller rug pull project called Bee Token to create SafeMoon.
In the early days of the project, SafeMoon was mooning, and its token had exploded in price resulting in a peak valuation of $5.75 billion. A loyal fan base formed around the project, and influencers talked about it constantly. There were even rumors of a collaboration with Mastercard.
However, Findeisen alleges the project was designed as a rug pull from its inception.
SafeMoon’s locked liquidity pool
Earlier in April, Findeisen posted an exposé on former SafeMoon promoter Ben Phillips and alleged that he had netted over $12 million by pumping and dumping the token.
Rogue influencers are one thing, but Findeisen’s latest post makes much more damning accusations. This time, Findeisen claims foul play over SafeMoon’s locked liquidity pool, alleging that the pool isn’t locked at all.
A liquidity pool is a crowdsourced pool of cryptocurrencies locked in a smart contract. They consist of token pairings used to facilitate trades on a decentralized exchange (DEX).
Locked liquidity pools mean the project owners/developers cannot access the funds in the pool. Locked pools give investors confidence that those in charge won’t steal their funds.
However, in analyzing SafeMoon’s wallets and blockchain activity, Findeisen found that founder Kyle had been slowly rug pulling funds since the start.
“The total amount of SafeMoon that came into Kyle’s wallet was 164 trillion tokens. Fast forward to mid-September to mid-December, this grossed him just under $10.3 million.”
In late 2020, a Twitter account called WarOnRugs called out SafeMoon for its shady practices, which gave rise to FUD, causing many people to question the project. However, the WarOnRugs was found to be complicit in a rug pull of their own which gave SafeMoon a chance to rally its community against the accusations and move past the event by having Kyle step down from the project.
Things take another twist
After Kyle stepped aside, Lead Dev Thomas “Papa” Smith took over as the project’s leader.
The SafeMoon Army hailed him as the SafeMoon’s savior, but according to Findeisen, he too was on the take, albeit craftier.
“When Kyle stole money he just took from the liquidity pool. But Papa was different, he had a story about it, he justified himself by saying he wasn’t rug pulling liquidity, he was moving the funds, you know fund migration from a Version 1 liquidity pool to a Version 2.”
SafeMoon migrated to Version 2 around December 2021 and required holders to migrate their wallets to the new contract. Failure to do so meant losing all funds in a 100% tax, which forced V1 token holders to migrate.
Researchers found that Papa had actioned this process on 18 separate occasions. In doing so, he took $143 million of liquidity.
“So Thomas withdrew liquidity 18 different times. He actually held on to $143 million worth of liquidity. The sum of outgoing SafeMoon transactions was about $100 million. Of that $100 million, $58.9 million went to Bitmart and $8.1 million went to other undisclosed wallets.”
Findeisen goes into further details about SafeMoon’s CEO John Karony copying the Trust wallet code to launch a native wallet; the company jumping on trends that lead to nowhere, an FBI investigation, and lawsuits.
Findeisen also accused Karony of stealing from the project. This time via Bitmart payments that should have gone into the liquidity pool. Instead, Karony received these payments in his personal wallet. Findeisen alleges Karony transferred $3 million out of the Bitmart payments to Kyle’s wallet.
Karony has refused to comment on the Bitmart process. The company’s Twitter has not responded to the allegations.