The US Justice Department introduced that two males have been charged with conspiracy to commit wire fraud and money laundering “in connection with a million-dollar scheme to defraud purchasers of NFTs advertised 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 way of a number of transactions.
Their real-life identities have been disclosed after investigators regarded into the related report of transactions completely saved on Ethereum’s blockchain and analyzed the related transfers to accounts on Coinbase.
$1.1 Million NFT Project Rugpulled
According to the legal grievance released by the court docket, on January 9, 2022, a whole of 8,888 Frosties tokens value roughly $1.1 million have been bought out 48 minutes after the general public sale had gone stay. Each 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 Wallet Address-1 were then transferred to a separate cryptocurrency wallet address (“Fraud Wallet Address-1″).” In whole, 356.56 ETH was despatched to the “Fraud wallet address,” as later recognized by the investigators.
Also, 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.
Identifying 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 trade to its prospects allowed legislation enforcement to determine the identities of the account holders.
Investigators tracked down the actions related to the fraud pockets handle and efficiently recognized transfers carried out between the Coinbase accounts and the fraud pockets linked to Frosties funds.
Before Nguyen and Llacuna have been arrested in Los Angeles, they have been making ready to launch a follow-up NFT scam known as “Embers.” It was alleged to go stay round March 26, 2022, and generate extra income as much as $1.5 million in digital property.
Charged with fraud and money laundering, Nguyen and Llacuna are thought of the early indicator of US legislation enforcement ramping up its resources and instruments focusing on NFT rug pulls.
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