By Jack Brewer and Erica Lukes
Expanding Frontiers Research obtained numerous records pertaining to SafeMoon from the Federal Trade Commission and the U.S. Securities and Exchange Commission. The records, obtained through the Freedom of Information Act, include dozens of complaints filed on the volatile cryptocurrency. Ironically named for its purported safe financial ride to the moon, the current value of the token is a mere fraction of its all time high in 2021, a quick climb that preceded a spiral in which investors lost the bulk of their money in most cases. The complaints leveled accusations ranging from deception and misrepresentation to outright scamming for the purpose of decreasing the account values of those holding the tokens.
One complaint logged by the FTC on May 24, 2022, alleged that the account holder's $183,000 in tokens was converted to $201 after they used the SafeMoon app as instructed “to convert from V1 to V2.” The complainant further alleged, “[T]hey will not respond other than to send me the V2 guidelines.”
Other reports include allegations SafeMoon skimmed funds from a liquidity pool. One complaint described the actions as stealing from hardworking investors.
SafeMoon CEO John Karony was sent a link to the records obtained and requested to clarify his position on the integrity of the cryptocurrency. He did not immediately respond.
Following reported allegations and denials of the launching of an FBI investigation into SafeMoon, Expanding Frontiers Research submitted a FOIA request to the Bureau in June 2022 for records pertaining to the cryptocurrency. Recent correspondence with the FBI indicates responsive records are currently under review by a disclosure analyst to determine if any redactions are required. The estimated completion date of the request is March 2023. Additional records are also anticipated from the Consumer Financial Protection Bureau, based on correspondence provided in response to a FOIA request submitted by EFR.
The Dec. 1 final response from the SEC cited privacy exemptions in the withholding of certain records, as well as FOIA Exemption 7a, which protects records from release which were compiled for law enforcement purposes. The use of the exemption does not necessarily indicate a violation of law is reflected in reports withheld.
The FTC advised in its Jan. 25 response that, in addition to the 143 responsive complaints released, two additional complaints were withheld under FOIA Exemption 3. FTC stated it “may not disclose any material reflecting a consumer complaint obtained from a foreign source if that foreign source has requested confidential treatment.”
View the response letters and records obtained from the SEC and FTC below:
SafeMoon operations gained interest to EFR as circumstances of crypto promotion became increasingly apparent in UFO and adjacent circles. Multiple personalities featured at a May 2022 “UFO Mega Conference,” also billed as the “UFO Disclosure Symposium” and conducted in Vernal, Utah, allocated portions of their presentations to promoting cryptocurrencies. Similarly, reported Skinwalker Ranch owner Brandon Fugal emphasized his confidence in what has become known as decentralized finance, while repeatedly referencing SafeMoon and using its hashtags from his Twitter account of over 60,000 followers. The UFO-crypto overlap is also evident on YouTube.
It is not necessary to fully identify the motives behind such actions in order to see why consumers who wade into fringe culture should be concerned about financial exploitation or, at best, poorly conceived investment advice. We will explore such circumstances below.
UFO = Unlimited Financial Opportunity
Flying saucer enthusiasts - or perhaps more aptly stated, the cash and assets of flying saucer enthusiasts - have been targeted since the outset of the modern UFO phenomenon. Harold Berney was arrested in 1957 for what FBI Director J. Edgar Hoover and others called the “Trip to Venus” swindle (see pp184-185). Berney used a story about collaborating with beings from Venus as a means to separate a trusting woman from $38,000. With inflation, that's about 400 grand. Such sagas were unfortunately not uncommon, with opportunists sometimes employing spiritualism and patriotism as tools to invoke favorable emotional responses from their targeted audiences.
Investigative journalist and author David Troy noted to EFR in a Feb. 3 email how the Ballards' “I AM” cult and William Dudley Pelley's Silver Shirts shared interests in the gold standard and anti-New Deal sentiments. “These ideas found a seamless transition into ufology networks in the post-war space age after 1945,” Troy continued. “Pelley transitioned straight into ufology in the 1950s.”
In more recent times, self-described psychic and ufologist Sean David Morton and his wife were convicted in 2017 of conspiracy to defraud the United States, among other charges. They advocated the “sovereign citizen” conspiracy and subsequently filed tax returns for millions of dollars to which the federal government ruled they were not entitled. The winding saga additionally involved their attempts to obstruct Uncle Sam from recovering money already erroneously refunded to them, as well as their efforts to pay the IRS with bogus documents. According to the Department of Justice, the Mortons also received thousands of dollars from clients to teach them the scheme and prepare and file fraudulent documents on their behalf. The couple was arrested on the charges in 2016 as they rather fittingly disembarked from a “Conspira-Sea Cruise.”
They were previously accused of using such venues to prospect for people who could be convinced Morton, who called himself “America's Prophet,” could use time travel and psychic powers to predict the stock market. In 2010 he was reported to have received some $6 million from investors who wanted in on the purported financial opportunity.
Conspiracy culture's dance with dubious financial transactions does not always so clearly rise to the level of illegal activity. Sometimes it may be more matters of breaches of reasonable ethics and eroding public trust that, while involving sky high tales, does not result in criminal charges. Such examples include George Filer, who sold “flu lights” through a variety of UFO websites and e-lists, and Steven Greer's repeated crowd-funding of supposed tell-all UFO documentaries that were long on sensation and short on fact. Greer's ventures, which include workshops of close encounter protocols that purportedly teach participants how to interact with a non-human intelligence at thousands of dollars per seat, generated hundreds of thousands of dollars in annual revenue for years.
It only seems natural that people discussing cryptocurrency and related products, and apparently representing those products as compensated consultants in at least some instances, would make their ways into UFO subculture. By nature, UFO speakers often express a stance of distrust for government and authority figures. The above mentioned Steven Greer, for instance, long told audiences an extraterrestrial presence among us meant us only good will, but the powers that be spin it as nonexistent or malevolent. This, he suggested, obstructs the unsuspecting public from knowing the beings could teach humanity how to generate free energy, circumstances the government wants to keep deeply hidden for supposed economic reasons. Such themes are common.
The benefits of cryptocurrency, likewise, are often built around ideas of decentralization and escaping a ruling class. The lack of regulation, or taking the funds and banking procedures out of the restrictive hands of the feds, is often described as a benefit, not something to be concerned about. Stories of insider knowledge passed along to visionaries who get in on ground floors are popular. It stands to reason crypto entrepreneurs who share such common premises with various fringe speakers would want the audiences of those speakers to be made aware of their financial products and services. And scams.
In 2022 a fraudulent portfolio of cryptocurrency was used to extract some $2 million from investors sympathetic to QAnon. EFR spoke with reporter Ernie Piper whose team broke the story, and the interview may be viewed on the Feb. 3 edition of Expanding Frontiers. The saga included high profile QAnon influencers telling their thousands of followers they had access to secret military intelligence information. This, they claimed, revealed the types of cryptocurrencies that were going to explode in value. Reality subsequently proved to be much different, resulting in lost savings and at least one related suicide.
“Crypto, like gold before it, is attractive to people who are skeptical of government and fiat money,” David Troy explained to EFR. “There are few people more skeptical of governments than people who are convinced that they are withholding information about extraterrestrial contact. Therefore it is natural that gold, crypto, and UFO audiences have long overlapped.”
All of which brings us to the 2022 UFO Disclosure Symposium in Utah.
UFO Mega Con
It wasn't the usual dubious pre-conference hype, credulous narratives, or over-promising and under-delivering of supposed groundbreaking evidence that attracted the attention of EFR to the 2022 UFO Mega Con, aka UFO Disclosure Symposium. The event conducted in May in Vernal, Utah, indeed had those characteristics, but that did not particularly differentiate it from most any other gathering on the UFO circuit where buyers should beware. What became of interest to EFR was the sowing of cryptocurrency promotion into the usual banter. This was not only an emerging theme at the conference but proved to be identifiable across multiple platforms.
Professor Avi Loeb was billed as an expert, presumably of UAP-related subject matter, for the 2022 UFO Disclosure Symposium. The celebrated Harvard Professor of Science made news since 2021 with the launching of his ambitious Galileo Project, goals of which include getting a lock on extraterrestrial technological signatures. That loosely includes identifying an ET that might be buzzing our neighborhood.
Loeb showed a tendency to give the media fantastic statements, resulting in stirring up attention well beyond the UFO bubble. The Galileo story dovetailed rather conveniently for writers with the Pentagon UFO story, personalities of which included Dr. Travis Taylor, who also appeared at the Disclosure Symposium and is a popular cast member of the show The Secret of Skinwalker Ranch. Whatever Loeb's motives for arguably courting the credulous, which of course might include building funding channels, the professor could objectively be described as UFO-friendly. He has been a rather frequent guest at various UFO shows and events.
In April, the Professor of Science was rather remarkably a speaker at Bitcoin 2022. This occurred in conjunction with Eric Weinstein, who was previously reported to be managing the hedge fund Thiel Capital. Weinstein and Loeb reportedly “postulated about other cultures living in the stars,” and “focused on the cultural implications of using Bitcoin, specifically as a means to diversify the human race across the cosmos.”
EFR reached out to Professor Loeb and asked if he cared to clarify how Bitcoin will diversify humanity across the cosmos. He was also offered an opportunity to comment on his involvement with events and individuals promoting cryptocurrency. Loeb was particularly encouraged to clarify his relationship with Bitcoin and how the token is relevant to his work.
Avi Loeb did not immediately respond to the request for comment.
Also appearing at the 2022 UFO Disclosure Symposium was Paul Hynek, son of famed scientist and pioneering ufologist Dr. J. Allen Hynek. He is reportedly “active in cryptocurrency and Blockchain, advising several companies in the space,” and his interests have not been omitted from his involvement in the UFO genre.
Hynek offered high praise to Bitcoin during a YouTube appearance titled Bitcoin, UFOs and You. Asked about his “research on Bitcoin,” Hynek proceeded to make parallels between the token and UFOs, stating the origin of neither is conclusively known:
“Bitcoin and UFOs, together at last,” Hynek remarked.
The video goes on to include discussion of the use of Bitcoin as a “celestial exchange system.” Hynek further expressed his assessment to viewers of benefits of Bitcoin, such as paper currency keeps getting printed, while the cryptocurrency has a contracted finite number. This would guarantee at least a certain degree of value, it was questionably suggested.
Paul Hynek did not immediately respond to a request to ask a few questions about the overlapping of cryptocurrency and the UFO community. He was advised EFR was seeking clarification on his position on the use of Bitcoin as a “celestial exchange system.” No responses were received as of this writing.
Nouriel Roubini is much less convinced than Hynek, Loeb, Fugal and others purport to be of the promising future of cryptocurrency. As a matter of fact, Roubini told Yahoo Finance in January that belly-up crypto ventures are not the exception but the rule, and that “99% of crypto is a scam.” Serving as a senior economic advisor in the Clinton and Obama administrations, the holder of a BA in political economics and a doctorate in international economics has a CV from here to there. Let's just say Roubini has a qualified opinion.
The vast majority who invested in Bitcoin, Roubini went on, did not get onboard early, but purchased after the price was high. They bought well above current market value, “so they lost their shirts.”
“Out of 20,000 [Initial Coin Offerings, or ICOs] officially 80% were a scam and another 17% have gone to zero. You have to stay away,” Roubini warned. “And most of these people belong literally in jail.”
Nouriel Roubini's statements to Yahoo Finance:
Chris Lehto appeared at the 2022 UFO Disclosure Symposium. He is apparently a former F-16 pilot who makes his home in Portugal, where he contributes UFO-related articles to local media. He is also the founder of the UAP Society, whose website proclaims, “The DeSci NFT funded UAP research revolution has begun.”
That means something to the effect decentralized science is funded through the sale of non-fungible tokens, or NFTs, which is ultimately supposed to reveal answers about unidentified aerial phenomena. Chris Lehto sells NFTs, which are unique digital images that some seem to believe are - or will be - of value. You have probably seen some “bored ape” NFT images around, for instance.
Lehto's hundreds of NFTs were created on the Ethereum Blockchain. The digital images are offered for purchase in ETH, or Ethereum cryptocurrency. They have alien and UFO themes, and start in price around 100 bucks or so and go up from there. Most are under $1,000 with a couple of offerings at substantial 5-digit prices, or at least that was the case with the “Alien Dreams Genesis Collection” posted on a page at a site called OpenSea.
There's a lot to unpack. The page says, for instance, sales of the NFTs fund UAP detectors on land and in space. Part of royalties fund science initiatives, it is further stated, and the UAP Society is propelling the world's transition to a deeper awareness and understanding of the phenomenon using disruptive Web3 initiatives.
“The key technology that I believe makes WEB3 and digital collectibles especially exciting is they are fully decentralized,” Chris Lehto wrote to EFR in a Feb. 3 email. “This means no government, bank, or company approves the transaction of UAP Society digital collectibles. This means anyone in the world with an internet connection can take part in UAP Society’s exciting projects. You don’t have to be on an approved stock exchange and you aren’t just giving a donation. Of course you can donate but we want invested people. We want an unstoppable decentralized digital behemoth. You build that with exciting, desirable products that last. We want a product that will increase in value in the future.”
But will it increase in value?
“We will increase the value of our digital collectibles by giving the people (us!) what we want. We (at least me personally) want actual movement and progress on anomalous phenomena investigation. We want open source ambitious investigation projects that aim directly at the heart of the mystery. We want projects that are not afraid of the woo and will ask difficult questions that mainstream science and academic institutions are scared to ask. And, if it produces results, we want our investment to reward us with a share of the winnings. If we pool our resources together, then we should all reap from the benefits.”
As stated, there's a lot to unpack. Lehto was encouraged to describe what kind of science projects he's undertaking.
“We are in the final stages of our next product launch, the CryptoUAPeez digital collectible. We will launch the white paper shortly but the outline is UAP Society’s mission is to propel the world to a deeper awareness and understanding of the phenomena through disruptive WEB3 initiatives. Our next product, CrytpoUAPeez, will at a minimum fund Sky360 camera placement and management at Mount Wilson Ranch.”
“We are working hard in the background during the bear market so we are ready,” Lehto concluded.
By the way, Lehto says Paul Hynek is on board. This time they're making a visible college, Lehto asserted, by leveraging Web3 technology and using NFTs to fund science pointed at UAP:
SafeMoon LLC was created in March 2021. In April its currency reached its all time high market cap of $17 billion. As of this writing, it is valued at $295 million, a decrease of over 98% from April 2021.
The CEO of the Pleasant Grove, Utah-based company, John Karony, is a reported former Department of Defense analyst (2015-2021). He's had his share of challenges with SafeMoon, to put it mildly. Internet searches quickly turn up everything from allegations of Ponzi schemes and fraud to a lawsuit between the CEO and his mother. The SafeMoon saga is complex and muddy.
Vice reported a 23,225% increase in SafeMoon value between March and April of 2021. This, the outlet noted, was despite the coin having no clear use. It was also noted in the May 2021 article that celebrity endorsements and social media hype aided in the price explosion.
By February 2022 it was reported those celebrities were being named in a class action lawsuit. The suit accused Karony and company of misleadingly inflating the value of SafeMoon in order to sell their personal holdings at maximum profits, or what is known as a “pump and dump” scheme. The celebrities, which included popular musical performers, reportedly received compensation in the form of payment and/or cryptocurrency for their involvement. The lawsuit alleged the scheme was to trigger the initial price boost that subsequently plummeted over 80% by the end of 2021.
Notably, television star Kim Kardashian agreed to pay a $1.26 million fine to the Securities and Exchange Commission to settle civil charges resulting from an Instagram post she made endorsing crypto asset EthereumMax. Kardashian was charged by the SEC for failing to disclose she was paid a quarter of a million dollars to publish the post. SEC Chair Gary Gensler emphasized the case was a reminder that when celebrities and influencers endorse investment choices and cryptocurrencies, it doesn't mean the investment products are right for all investors.
The Wall Street of Crypto
In May 2022, KUTV in Salt Lake City reported on Utah's bid to become “the Wall Street of crypto.” Utah State Representative Jordan Teuscher and Senator Kirk Cullimore sponsored digital currency and blockchain technology bills to encourage the use of crypto and allow the state to accept it as payment. It was suggested Utah wanted to signal that it is a state welcoming to virtual currency. Proponents suggested that many people, like refugees, were left out of the traditional banking structure. Companies turning to crypto were supposedly helping provide them with banking services.
In June, “mixed emotions” were expressed about Utah's blockchain bills. Some had concerns about technological details of putting a crypto state economy into actual practice. While Rep. Teuscher wrote on Facebook the bills would be “HUGE for our state in attracting web3 companies and further enable Utah to lead the nation in digital innovation,” others shared concerns about the state's ability to control the types of entities that would be structured in Utah. Expressing this concern was Attorney Sam Mehr of the Utah Blockchain Coalition Advisory Board.
By September, the Department of Justice accused the New Jersey-based BitClub Network of conducting a $722 million investment scam which ensnared several Utah properties. Court documents reportedly traced a path of how investments received by Utah companies were sent through BitClub and its affiliates. While all of the circumstances had not developed in the time since Utah began more aggressively courting the crypto scene, the story nonetheless served as a potential foreboding omen.
David Troy considered in his writings how crypto gained interest in the political sector during 2021. Leaders of New York and Miami expressed commitments to make their cities “crypto capitals.” While such movements attract players like Peter Thiel, Troy warned that new kinds of cryptocurrencies can undermine the dollar and even other forms of crypto. Troy further suggested such undermining is attractive and opportunistic to foreign adversaries.
“The attack on government control over the dollar and the idea that money, like gold, should be private and out of the hands of government officials is fundamentally a fascist idea,” Troy further explained, “more aligned with the vision of Mussolini than of Roosevelt. The gold standard has always been brittle and required departures when crisis finally came; likewise, cryptocurrencies, which are expensive, difficult to use, environmentally hazardous, and lacking in legal frameworks for dealing with errors or crime, are ill suited to the complex, highly evolved world of modern banking. It is neither practical nor reasonable to expect the entire world to shift to 'hard money' banking, not least because so many would be harmed in the process and others, who had done little besides get in on the Ponzi scheme early, would be unfairly enriched.”
In spite of such circumstances as SafeMoon crashing 80% by December 2021, news surfacing of a class action lawsuit no later than early 2022, and Brandon Fugal's participation on the above referenced Utah Blockchain Coalition Advisory Board, the cast member of The Secret of Skinwalker Ranch repeatedly tweeted favorably about the failing cryptocurrency company in 2022. Moreover, the “SafeMoon Army,” as it was known, showed enthusiasm for Fugal's support and popular crypto analysts considered it newsworthy when Fugal confirmed he owned SafeMoon tokens. During a March 8, 2022, YouTube video, the creator of which has over 20,000 subscribers, Fugal's tweets were explored in which he defended his knowledge of crypto and qualified he owned SafeMoon cryptocurrency, "More than most.":
Records obtained by EFR and posted above indicate complaints were submitted to the Federal Trade Commission on SafeMoon starting in April 2021, throughout 2022, and into 2023. A July 24, 2021, complaint, pictured below, indirectly references SafeMoon strategies such as building a group liquidity pool and charging token holders 10% fees for withdrawals in order to retain funds and investors.
Other complaints, such as this one from May 7, 2021, alleged that investors were unable to withdraw funds:
Brandon Fugal was provided a link to the FOIA records obtained and offered an opportunity to express his position on the integrity of SafeMoon. Fugal initially suggested, obtusely or otherwise, he did not understand why EFR would seek his comment. Fugal went on to acknowledge his support for digital currency and decentralized finance while distancing himself from SafeMoon management.
“I met with SafeMoon executives several times last year in response to requests for information regarding options to accommodate office expansion and strategic planning for potential future growth,” Fugal wrote in a Feb. 4 message. He hadn't met with them since June, he continued, adding that last time he looked, he had lost over 90% of his investment in SafeMoon. Giddy is the only company in “that market” in which he stayed in close contact, Fugal wrote.
Was he provided compensation from SafeMoon or Giddy?
EFR did not inquire about the extent Brandon Fugal takes responsibility for how his social media followers may be influenced by his words or if he continues to defend his knowledge of crypto.
Economist Nouriel Roubini could hardly disagree more with those clinging to crypto dreams. “The crypto bubble has burst for good and will not recover as these were assets with no intrinsic value,” he explained in an interview posted at London Speaker Bureau. Since their peak, he points out, Bitcoin has lost a significant percentage of its value while other top cryptocurrencies, such as Ethereum, have as well. He reiterates that over 80% of all Initial Coin Offerings were a scam in the first place.
There is indeed a revolution in financial services, Roubini asserts, but it's not about crypto or blockchain. It's called “FinTech” and is based on three related elements: Artificial Intelligence/Machine Learning (AI), Big Data (BD), and the Internet of Things (IoT). The Professor of Economics envisions it will revolutionize digital payment systems and asset management, among other financial necessities.
“I do not believe that the problems of security and scalability of cryptocurrencies can ever be resolved,” he explained. “At the conceptual level security and scalability are incompatible with the decentralization that crypto and blockchain claim to want to achieve. And if you have a system that gets you scalability and security with centralization you are back to traditional financial systems and/or their modern evolution that is non-blockchain based FinTech.”
“There is a reason why all societies rely on trusted institutions with a history of reputation, credibility and redress of fraud to ensure the safety and legality of financial and other transactions,” Roubini concluded. “The utopia of having decentralized, permission-less, trust-less algorithms that replace trusted and reputable institutions is a delusion that technology can provide a solution to fundamental problems of trust that only human institutions that have developed for millennia can resolve. There is no decentralized trust-less security or scalability in crypto and there will never be one.”
Buyers should always beware and exercise caution with investment products and services, and perhaps nowhere is that more the case than with venues and individuals who encourage uncritical belief in the fantastic prior to urging loosening of purse strings. To be as clear as possible, it's typically a bad idea to take financial advice from people actively trying to convince the public of stories surrounding the general concept that otherworldly beings are regularly flying the skies. Don't make important decisions for yourself and loved ones based on the statements of unreliable narrators.