
The U.S. Department of Justice (DOJ) has charged two people allegedly behind a million-dollar non-fungible token (NFT) “rug pull” scheme. The justice department said that they abandoned the NFT scheme within hours of selling it out and deactivated its website. They then transferred more than $1 million worth of crypto to their wallets.
NFT Buyers Condemed in Rug Pull Scam
The U.S. Justice Department announced Thursday that two 20-year-olds have been charged in a “non-fungible token (NFT) fraud and money-laundering scheme.” The defendants, Ethan Nguyen and Andre Llacuna, allegedly defrauded purchasers of NFTs advertised as “Frosties.”
According to the DOJ, on or about Jan. 9, the defendants “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.”
U.S. attorney Damian Williams declared:
The Frosties NFTs promised Mr. Nguyen & Mr. Llacuna to investors, but they sold it. They pulled the rug from under victims by closing the website almost immediately and transfer the money.
Nguyen and Llacuna were arrested in Los Angeles, California, as they prepared to sell a second set of NFTs advertised as “Embers,” the DOJ noted.
The Justice Department believes that Embers is “another fraud scheme,” noting that it was expected to launch on or around March 26 and anticipated to generate approximately $1.5 million in cryptocurrency proceeds.
The defendants “are each charged with one count of commit wire fraud … and one count of conspiracy to commit money laundering,” the DOJ said, noting that each count carries a maximum sentence of 20 years in prison.
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