Federal prosecutors are moving forward with criminal charges against the creators of the Safemoon cryptocurrency. Despite a recent memo from the Department of Justice (DOJ) instructing federal prosecutors to avoid cases that would require determining whether a digital asset is a security, the DOJ has chosen to proceed with the Safemoon case. This includes charges of securities fraud, wire fraud, and money laundering against the founders, who allegedly assured that the token's liquidity was locked while misappropriating funds for personal use. A federal judge has also denied the defendants' motion to dismiss the case, stating that the security status of Safemoon should be determined at trial. The DOJ's new policies do not dismiss fraudulent activities in the crypto space, yet the charge of securities fraud complicates the case as it necessitates proving that Safemoon is indeed a security. Since the founders' arrest, Safemoon's market capitalization has significantly diminished from over $1 billion to around $13 million, following its bankruptcy filing in late 2023.

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