Frosties creators arrested for $1.1 million NFT rug pull scam
- The creators of the
Frostiesproject could be looking at over 20 years in prison if they’re found guilty.
- The Frosties project was the first NFT
rugpull of 2022, and the scammers made away with $1.1 million in crypto.
- Rug pulls have accounted for $2.8 billion in stolen crypto funds in 2021.
The scammers sold 8888 NFTs to users at an average floor price of 0.04 Ether, making up a total of $1.3 million at the time. The two alleged scammers were arrested in Los Angeles in California and were each charged with “one count of committing wire fraud”, which could lead to a jail sentence of 20 years if they’re found guilty. Additionally, they have been slapped with a count of conspiracy to commit money laundering, which also carried a 20-year sentence.
NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money. Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.
Thomas Fattorusso, the IRS-CI Special Agent-in-Charge of the case, noted that NFTs “represents a new era for financial investments,” adding that the rules that apply to investments in real estate development would also apply to NFTs. “You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you. Our team here at IRS-CI and our partners at HSI closely track cryptocurrency transactions to uncover alleged schemes like this one,” he said.
Nguyen and Llacuna aren’t the first to carry out a rug pull scam. Last year, the Iconics project made away with about $150,000 worth of Solana tokens.
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