The US Justice Division introduced that two males have been charged with conspiracy to commit wire fraud and cash laundering “in reference to a million-dollar scheme to defraud purchasers of NFTs marketed as Frosties.”
The suspects, Ethan Nguyen and Andre Llacuna, have been accused of mendacity about advantages promised to NFTs consumers and withdrawing the cryptocurrency proceeds out of the Frosties account by means of a number of transactions.
Their real-life identities have been disclosed after investigators regarded into the related file of transactions completely saved on Ethereum’s blockchain and analyzed the related transfers to accounts on Coinbase.
$1.1 Million NFT Challenge Rugpulled
In line with the prison grievance launched by the courtroom, on January 9, 2022, a complete of 8,888 Frosties tokens price roughly $1.1 million have been offered out 48 minutes after the general public sale had gone stay. Every NFT went for 0.04 ETH, at the moment equal to round $130.
The grievance identified that roughly three hours after the sale, “the proceeds of the Frosties NFT sale that had been transferred to Frosties Pockets Deal with-1 have been then transferred to a separate cryptocurrency pockets tackle (“Fraud Pockets Deal with-1″).” In complete, 356.56 ETH was despatched to the “Fraud pockets tackle,” as later recognized by the investigators.
Additionally, as indicated by the DOJ’s press launch, Nguyen and Llacuna didn’t present advantages as marketed to the NFT consumers and transferred the cryptocurrencies to wallets beneath their management.
Figuring out the Suspects Behind the Scheme
IRS-CI Investigators matched Nguyen and Llacuna’s IP addresses used for selling Frosties on Discord with corresponding accounts on Coinbase. The KYC necessities imposed by the US alternate to its prospects allowed regulation enforcement to determine the identities of the account holders.
Investigators tracked down the actions related to the fraud pockets tackle and efficiently recognized transfers carried out between the Coinbase accounts and the fraud pockets linked to Frosties funds.
Earlier than Nguyen and Llacuna have been arrested in Los Angeles, they have been making ready to launch a follow-up NFT rip-off referred to as “Embers.” It was alleged to go stay round March 26, 2022, and generate extra income as much as $1.5 million in digital belongings.
Charged with fraud and cash laundering, Nguyen and Llacuna are thought of the early indicator of US regulation enforcement ramping up its assets and instruments focusing on NFT rug pulls.
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