“Frosties”, which turned out to be a Rugpull scam NFT The two people behind the project were charged Thursday with money laundering and electronic fraud by US prosecutors in the Southern District of New York.
The Discord server of the project in question suddenly disappeared hours after the distribution of NFTs.
An NFT Rugpull Fraud Is Prosecuted For The First Time In US History
This development marks the first time US authorities have prosecuted an NFT rugpull scam.
Ethan Nguyen and Andre Llacuna, whom prosecutors claim are behind the NFT project called Frosties, defrauded NFT investors for over $1 million.
These two names, facing conspiracy and financial crimes, are the first NFT suspects in the USA.
Authorized lawyer Damian Williams said in his statement on the subject:
“Mr Nguyen and Mr Llacuna promised investors the benefits that Frosties NFTs would bring, but when the NFTs were completely sold out, they targeted their victims with rugpull scams and transferred the money they had stolen, shutting down their website immediately.”
Scammers Will Release A New NFT Collection On March 26
Homeland Security Investigations special agent Ricky J. Patel said the following about the developments:
“The arrested thieves hid behind their online identities, promising investors prizes, sweepstakes and special deals. After that, they implemented a rugpull scam scheme, leaving investors with empty pockets and no investments. New York Homeland Security Investigations’ Dark Web and Cryptocurrency Working with partners, the Task Force identified these scammers and caught another scammer just before they launched their NFT project.”
It has been announced that the scammers’ next fake NFT project will be a collection of 5,555 NFTs called Embers.