NFT Scammers Arrested for $1.1 Million Rug Pull

• Prosecutors of the United States government have charged two men to court for fraud after they orchestrated a rug pull scam

• NFT scammers Ethan Nguyen and Andre Llacuna allegedly earned over $1 million from the sale of Non-fungible tokens

• After selling the NFTs of the collection, they shut down the project and carted away its funds in crypto wallets

As the interest in NFT grows and investors see an opportunity to make money from the market of digitised art, fraudsters have also seized the chance to enrich their pockets by releasing scam projects.

United States prosecutors recently charged two men with fraud and money laundering, over their involvement in a cryptocurrency “rug pull” scheme.

The two alleged NFT scammers, Ethan Nguyen and Andre Llacuna earned  around $1.1 million by selling non-fungible tokens of cartoon-like characters, which they named “Frosties.”

Things were going well, until Nguyen and Llacuna shut down the collection and transferred its funds to crypto wallets that were not associated with the project, leaving Frosties investors without reward for their purchases.

According to the filed criminal complaint, the Internal Revenue Service, Criminal Investigation (IRS-CI) began investigating the project in January, after complaints about the fraud.

Read also: Bored Apes NFT Startup, Yuga Labs Raises $450 Million as Valuation Hits $4 Billion

Frosties was a trendy project after its launch and its 8,888 NFTs — priced at the $130 worth of Ethereum sold out within an hour of the collection’s launch.

Due to the rug pull, buyers earned only a few dollars when they tried to resell their NFTs and also lost hope of promised rewards by the project’s founders.

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