Dark side: a pair of Los Angeles 20-year-olds made off with $1.1 million dollars in an NFT rug pull this January. Bright side: the U.S. Department of Justice has charged the pair with federal crimes, making it explicit that NFT scams are fraud are officially prosecutable offenses.
Andre Llacuna and Ethan Nguyen collected money from investors for “Frosties” NFTs back in January. The tokens, which resemble anthropomorphic ice cream, were supposed to grant access to exclusive giveaways, passes to future NFTs, and a metaverse-based game, but hours after the project’s release, Nguyen and Llacuna transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control and deactivated the Frosties website. They ran like bandits with the money they’d received from investors, orchestrating a classic rug pull, which the Department of Justice describes as an occurrence where a project creator “solicits investments and then abruptly abandons a project and fraudulently retains the project investors’ funds.”
