Two NFT Rug-Pull Scammers Got Arrested For $1.1 Million Scam

Two NFT rug-pull scammers got arrested in the United States in a $1.1 million scam that involved ETH as we are reading furhter in our latest Ethereum news today.

The US DOJ Announced that the two men were charged with conspiracy to commit wire fraud and money laundering in connection to a multi-million dollar scheme and defraud customers of NFTs that were advertised as frosties. The two NFT rug-pull scammers Ethan Nguyen and Andre Llacuna were accused of lying about the promised benefits of NFT buyers and within the crypto proceeds out of the Frosties accounts and via multiple transactions.

The real identities were disclosed after an investigation in the records of transactions stored on the Ethereum blockchain and analyzed the associated transfers to Coinbase accounts. According to the criminal complaint that was released by courts, a total of 8,888 Froesties tokens worth up to $1.1 milion was sold out 48 minutes after the public sale went live. Each NFT went from 0.04 ETH to $130.

The complaint pointed out that three hours after the sale and the proceeds of the Frosties NFT sale were transferred to frosty wallet Addresses. Then they were transferred to a separate crypto wallet address and up to 356.56, ETH was sent to the Fraud wallet address which was later identified by the investigators. As indicated by the DOJ press release, Llacuna and Nguyen didn’t provide more benefits as advertised to the NFT buyers and transferred the crypto to wallets under their control.

The IRS-CI investigators matched the scammers’ IP addresses that were used to promote Frosties on Discord with their corresponding accounts on Coinbase. The KYC requirements imposed by the US exchange to the customers allowed law enforcement to figure out the identities of the account holders. The investigators tracked down the activities related to the fraud wallet addresses and identified the transfers conducted between the Coinbase accounts and the fraud wallet connected to the Frosties funds.

Before the scammers got arrested in Los Angeles, they were preparing to launch a new follow-up NFT scam dubbed Embers. It was supposed to go live by March 26, 2022, and generate revenue of up to $1.5 million in digital assets. The charged scammers are considered the indicators of US law fnrocement ramping up the resources and tools that target NFT Rug pulls.