DOJ Charges Two People In A Million Dollar Scheme To Defraud Investors – Regulation

nft rug pull

The United States Department of Justice (DOJ) has indicted two people allegedly behind a million-dollar non-fungible token (NFT) scheme. They exited the NFT project within hours of being sold out, deactivated the website and transferred more than $1 million worth of crypto into the wallets they controlled, the Justice Department explained.

NFT buyers scammed in a carpet scam

The US Department of Justice announced on Thursday that two 20-year-olds have been charged with “non-fungible token (NFT) fraud and money laundering”. The defendants, Ethan Nguyen and Andre Llacuna, allegedly defrauded buyers of NFTs advertised as “Frosties”.

According to the DOJ, on or about January 9, the defendants exited the Frosties NFT project within hours of selling the Frosties NFTs, deactivated the Frosties website and transferred approximately $1.1 million in cryptocurrency proceeds from the plan to various platforms. cryptocurrency wallets under their control over multiple transactions designed to obscure the original source of money.”

US Attorney Damian Williams said:

Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug from the victims, shut down the website almost immediately and transferred the money.

Nguyen and Llacuna were arrested in Los Angeles, California, as they prepared to sell a second set of NFTs advertised as “Embers,” the DOJ noted.

The Justice Department believes Embers is “another fraud scheme”, noting that it was expected to launch on or about March 26 and is expected to generate approximately $1.5 million in cryptocurrency revenue.

The defendants “are each charged with committing telefraud … and one count of conspiracy to commit money laundering,” the DOJ said, noting that each count carries a maximum penalty of 20 years in prison.

What do you think of this NFT carpet case? Let us know in the comments below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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