NFT Rug Pull: DOJ Charges Two People in Million-Dollar Scheme to Scam Investors

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The US Department of Justice (DOJ) has indicted two people who are alleged to be behind a $1 million non-fungible token (NFT) “rug pull” scheme. They abandoned the NFT project within hours of the sale, deactivated the website and transferred more than $1 million in crypto to wallets they controlled, the Justice Department explained.

NFT buyers defrauded in carpet pulling scam

The US Department of Justice announced on Thursday that two 20-year-olds have been charged in connection with a “non-fungible token (NFT) fraud and money laundering scheme”. The defendants, Ethan Nguyen and Andre Llacuna, allegedly defrauded buyers of NFTs advertised as “Frosties”.

According to the DOJ, on or about January 9, the defendants “abandoned the Frosties NFT project within hours of the Frosties NFT sale, deactivated the Frosties website, and transferred approximately $1.1 million in crypto proceeds. -currency from the program to various cryptocurrency wallets under their control in multiple transactions designed to obscure the original source of funds.

US Attorney Damian Williams said:

Mr. Nguyen and Mr. Llacuna promised investors the benefits of NFT Frosties, but when they sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money.

Nguyen and Llacuna were arrested in Los Angeles, Calif., as they prepared to sell a second set of NFTs advertised as “Embers”, the DOJ noted.

The Department of Justice considers Embers to be “another fraud scheme,” noting that it was slated to launch on or around March 26 and is expected to generate around $1.5 million in crypto proceeds. change.

The defendants “are each charged with one count of wire fraud…and one count of conspiracy to launder money,” the DOJ said, noting that each count carries a criminal offence. a maximum sentence of 20 years in prison.

What do you think of this NFT mat pull case? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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