The company and the token have been the subject of several controversies: having been compared to a ponzi-scheme, not delivering on products, having multiple class-action lawsuits filed against them, and facing serious fraud allegations.

In November 2023, the SEC and the United States Department of Justice charged SafeMoon and its executive team with fraud, the unregistered offering of securities, and money laundering.

Upon release, Vice reported that between 14 March and 21 April 2021, SafeMoon increased in value by 23,225% following celebrity endorsements from musicians Lil' Yachty and Nick Carter, YouTuber Logan Paul, social media hype, new exchange listings, and retail investors.

[19] On 27 August 2022, John stated that his reasons for discontinuing his work in West Africa were due to supply chain problems, which is disputed by his mother in the ongoing Project Pheonix lawsuit.

[26] As part of consolidating to V2, the SafeMoon team implemented a deadline to migrate their tokens, or else investors would be faced with a 100% tax.

The charges reported that as SafeMoon's market capitalization exceeded $8 billion, they fraudulently diverted millions of dollars from the 'locked' liquidity for personal gain.

"[35] The token was described pejoratively in May 2021 as a "meme coin" alongside Dogecoin and Shiba Inu, with much of its value attributed to the result of the 2021 crypto market frenzy.

[42] In April 2022, Stephen "Coffeezilla" Findeisen, a prominent independent researcher who investigates crypto scams, accused the SafeMoon team of misappropriating millions of dollars.

[43] According to Findeisen, SafeMoon CEO Karony had been removing funds from the liquidity pool which is the primary explanation of the crypto's price pattern (Figure 1).

Former SafeMoon CTO, Thomas "Papa" Smith, was the only person who responded to Findeisen's claims stating that funds were taken from the "locked liquidity pool" before Karony's appointment.

He sent Smith evidence of this in the form of a blockchain transaction showing an outflow of 36.7 trillion tokens from the liquidity pool, dated 5 March 2021.

[17][45] On the same day, the U.S. 11th Circuit Court of Appeals ruled in a lawsuit against Bitconnect that the Securities Act of 1933 extends to targeted solicitation using social media.

[47] On 22 August 2022, it was documented that David Portnoy, who was also a defendant in this case, was dismissed from the lawsuit after it was revealed that he never received any compensation from Safemoon for promoting the token and that he also lost his investment from buying SFM.

As part of Project Pheonix, a separate company Emanations Communications Group LC (ECG) was set up and led by SafeMoon CEO John Karony's mother, Jennifer, to provide antenna technology to The Gambia.

[51] The company has since been seized by Lex Vest Ltd.[18] As part of this venture, John invested $5 million into the project in June 2021.

[53] ECG determined that John Karony created too many regulatory risks and that due to multiple lawsuits filed against him and his company (SafeMoon), they were uncomfortable accepting any more capital investments from him.

John then negotiated an offer to pay them of up to $4.5 million, to be paid out over time, with the understanding that Jennifer was again removed from consideration.

On 27 August 2022, John stated that his reasons for discontinuing his work in West Africa were due to supply chain problems, which is disputed by his mother.