Cryptocurrency

DOJ Charges 2 NFT Scammers Over ‘Frosties’ Rug-Pull

The US Department of Justice has charged two 20-year-olds, Ethan Nguyen and Andre Llacuna, with conspiracy to commit wire fraud and conspiracy to commit money laundering due to their efforts to scam NFT collectors out of an estimated $2.5 million worth of cryptocurrency.

The department says(Opens in a new window) Nguyen and Llacuna allegedly stole $1 million worth of cryptocurrency through a rug-pull scam—reveal a new crypto project, accept people’s money, and then disappear without ever releasing a product—involving a collection of NFTs known as Frosties.

As the DOJ explains, “Frosties purchasers would be eligible for holder rewards, such as…giveaways, early access to a metaverse game, and exclusive mint passes to upcoming Frosties seasons.” Instead, the duo “abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.”

But it seems the pair wasn’t going to stop there. The DOJ says they were “preparing to launch the sale of a second set of NFTs advertised as ‘Embers,’ which was anticipated to generate approximately $1.5 million in cryptocurrency proceeds,” before they were arrested.

Both charges brought against the pair, conspiracy to commit wire fraud and conspiracy to commit money laundering, have maximum 20-year prison sentences.


Source By https://www.pcmag.com/news/doj-charges-two-nft-scammers-over-frosties-rug-pull