{"id":2305,"date":"2022-03-25T14:38:53","date_gmt":"2022-03-25T14:38:53","guid":{"rendered":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/"},"modified":"2022-03-25T14:38:54","modified_gmt":"2022-03-25T14:38:54","slug":"two-men-arrested-for-1-1-million-nft-rug-pull-scam","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/","title":{"rendered":"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam"},"content":{"rendered":"

Source: https:\/\/www.theverge.com\/2022\/3\/24\/22995107\/us-arrest-charges-crypto-nft-rug-pull-frosties-ethan-nguyen-andre-llacuna<\/a>
\n
<\/br><\/code><\/p>\n

\n

US government prosecutors have charged two men<\/a> with fraud and money laundering over a cryptocurrency \u201crug pull\u201d scheme. Ethan Nguyen and Andre Llacuna allegedly earned around $1.1 million by selling non-fungible tokens (or NFTs) based on cartoon-like characters called \u201cFrosties.\u201d After selling the NFTs, they shut down the project and transferred its funds to a series of separate crypto wallets, leaving Frosties owners bereft of promised rewards.<\/p>\n

According to the criminal complaint<\/a>, the Internal Revenue Service, Criminal Investigation (IRS-CI), and Homeland Security Investigations (HSI) began investigating Frosties in January, shortly after receiving complaints about the scam. Frosties was a buzzy project whose 8,888 NFTs \u2014 priced at the Ethereum equivalent of roughly $130 \u2014 sold out within an hour of the public launch.<\/p>\n

But as chronicled by Protocol<\/em><\/a>, the creators abandoned it almost immediately. Buyers earned only a few dollars when they tried to resell their NFTs, and they gave up any hope of seeing future promised rewards, including 3D versions of their avatars and a Frosties video game. (Some scammed community members nonetheless attempted to resurrect the Frosties as a separate NFT lineup.) Now, the two men behind Frosties have been arrested in Los Angeles, California.<\/p>\n

\n
\n <\/p>\n

<\/p>\n\"Hey<\/p>\n

<\/source><\/picture>\n

<\/span><\/p>\n

<\/span><\/p>\n

An alleged message from Ethan Nguyen to a Frosties community moderator.<\/figcaption><\/span><\/p>\n<\/figure>\n<\/div>\n

The complaint includes an apparent apology and confession from Nguyen to the moderator of the Frosties community Discord server. \u201cI know this is shocking, but this project is coming to an end. I never intended to keep the project going, and I don\u2019t have a plan for anything in the future,\u201d it reads. The message goes on to say Nguyen sent the moderator some Ethereum \u201cfor your troubles\u201d and recommends deleting their Discord account. \u201cI want you to know that I do care. I appreciate you, even if you don\u2019t appreciate me,\u201d it concludes.<\/p>\n

The Frosties operators apparently remained confident enough to plan a follow-up series called \u201cEmbers\u201d that was supposed to launch later in March. Embers\u2019 roadmap included a $50,000 charity donation and a community-controlled wallet that would hold a quarter of the initial sales funds \u2014 and while the Red Cross confirmed receiving the donation, the latter promise appears far more dubious.<\/p>\n

But among other details, investigators matched Nguyen and Llacuna\u2019s Discord account data (including Nguyen\u2019s IP address and Llacuna\u2019s email address and phone number) with corresponding accounts on the Coinbase cryptocurrency exchange. The Coinbase accounts were linked with a Citibank credit card and government ID that let law enforcement track the pair down. Investigators also traced a series of transfers through which Nguyen and Llacuna allegedly tried to obscure where they were sending the Frosties funds, leading to the money laundering accusations.<\/p>\n

\n <\/p>\n

<\/p>\n\"An<\/p>\n

<\/source><\/picture>\n

<\/span><\/p>\n

<\/span><\/p>\n

The planned Embers NFT roadmap.<\/figcaption><\/span><\/p>\n<\/figure>\n

Crypto \u201crug pull\u201d schemes<\/a> are extremely common, but criminal cases remain far less numerous. For one thing, the teams behind NFT series often don\u2019t reveal their legal identities \u2014 until recently<\/a>, even the founders of the super-high-priced Bored Ape Yacht Club series remained pseudonymous. For another, lucrative NFT series launches are a relatively recent phenomenon. And the legal status of NFTs in general can be murky.<\/p>\n

But the Justice Department release is unambiguous about calling Frosties a scam. \u201cNFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development,\u201d said IRS-CI Special Agent-in-Charge Thomas Fattorusso in a statement. \u201cYou can\u2019t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you.\u201d In any case, if you are<\/em> going to do it, you probably shouldn\u2019t admit to it on Discord.<\/p>\n<\/div>\n


<\/br><\/code><\/p>\n

Source: https:\/\/www.theverge.com\/2022\/3\/24\/22995107\/us-arrest-charges-crypto-nft-rug-pull-frosties-ethan-nguyen-andre-llacuna<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: US government prosecutors have charged two men with fraud and money laundering over a cryptocurrency \u201crug pull\u201d scheme. Ethan Nguyen and Andre Llacuna allegedly earned around $1.1 million by selling non-fungible tokens (or NFTs) based on cartoon-like characters called \u201cFrosties.\u201d After selling the NFTs, they shut down the project and transferred its funds to […]<\/p>\n","protected":false},"author":1,"featured_media":2306,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15,8],"tags":[16],"class_list":["post-2305","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-policy","category-technology","tag-policy"],"yoast_head":"\nTwo men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source: US government prosecutors have charged two men with fraud and money laundering over a cryptocurrency \u201crug pull\u201d scheme. Ethan Nguyen and Andre Llacuna allegedly earned around $1.1 million by selling non-fungible tokens (or NFTs) based on cartoon-like characters called \u201cFrosties.\u201d After selling the NFTs, they shut down the project and transferred its funds to […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/\" \/>\n<meta property=\"og:site_name\" content=\"Science and Nerds\" \/>\n<meta property=\"article:published_time\" content=\"2022-03-25T14:38:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-25T14:38:54+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"419\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/\",\"url\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/\",\"name\":\"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds\",\"isPartOf\":{\"@id\":\"https:\/\/scienceandnerds.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1\",\"datePublished\":\"2022-03-25T14:38:53+00:00\",\"dateModified\":\"2022-03-25T14:38:54+00:00\",\"author\":{\"@id\":\"https:\/\/scienceandnerds.com\/#\/schema\/person\/ea2991abeb2b9ab04b32790dff28360e\"},\"breadcrumb\":{\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage\",\"url\":\"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1\",\"contentUrl\":\"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1\",\"width\":800,\"height\":419},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/scienceandnerds.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/scienceandnerds.com\/#website\",\"url\":\"https:\/\/scienceandnerds.com\/\",\"name\":\"Science and Nerds\",\"description\":\"My WordPress Blog\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/scienceandnerds.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/scienceandnerds.com\/#\/schema\/person\/ea2991abeb2b9ab04b32790dff28360e\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/scienceandnerds.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/7e6e14fc6691445ef2b2c0a3a6c43882?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/7e6e14fc6691445ef2b2c0a3a6c43882?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/scienceandnerds.com\"],\"url\":\"https:\/\/scienceandnerds.com\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/","og_locale":"en_US","og_type":"article","og_title":"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds","og_description":"Source: US government prosecutors have charged two men with fraud and money laundering over a cryptocurrency \u201crug pull\u201d scheme. Ethan Nguyen and Andre Llacuna allegedly earned around $1.1 million by selling non-fungible tokens (or NFTs) based on cartoon-like characters called \u201cFrosties.\u201d After selling the NFTs, they shut down the project and transferred its funds to […]","og_url":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/","og_site_name":"Science and Nerds","article_published_time":"2022-03-25T14:38:53+00:00","article_modified_time":"2022-03-25T14:38:54+00:00","og_image":[{"width":800,"height":419,"url":"https:\/\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg","type":"image\/jpeg"}],"author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/","url":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/","name":"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam - Science and Nerds","isPartOf":{"@id":"https:\/\/scienceandnerds.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage"},"image":{"@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage"},"thumbnailUrl":"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1","datePublished":"2022-03-25T14:38:53+00:00","dateModified":"2022-03-25T14:38:54+00:00","author":{"@id":"https:\/\/scienceandnerds.com\/#\/schema\/person\/ea2991abeb2b9ab04b32790dff28360e"},"breadcrumb":{"@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#primaryimage","url":"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1","contentUrl":"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1","width":800,"height":419},{"@type":"BreadcrumbList","@id":"https:\/\/scienceandnerds.com\/2022\/03\/25\/two-men-arrested-for-1-1-million-nft-rug-pull-scam\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/scienceandnerds.com\/"},{"@type":"ListItem","position":2,"name":"Two men arrested for $1.1 million NFT \u2018rug pull\u2019 scam"}]},{"@type":"WebSite","@id":"https:\/\/scienceandnerds.com\/#website","url":"https:\/\/scienceandnerds.com\/","name":"Science and Nerds","description":"My WordPress Blog","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/scienceandnerds.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/scienceandnerds.com\/#\/schema\/person\/ea2991abeb2b9ab04b32790dff28360e","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/scienceandnerds.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/7e6e14fc6691445ef2b2c0a3a6c43882?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/7e6e14fc6691445ef2b2c0a3a6c43882?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/scienceandnerds.com"],"url":"https:\/\/scienceandnerds.com\/author\/admin\/"}]}},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/scienceandnerds.com\/wp-content\/uploads\/2022\/03\/two-men-arrested-for-1-1-million-nft-rug-pull-scam_623dd3fe2397b.jpeg?fit=800%2C419&ssl=1","_links":{"self":[{"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/posts\/2305"}],"collection":[{"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/comments?post=2305"}],"version-history":[{"count":1,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/posts\/2305\/revisions"}],"predecessor-version":[{"id":2307,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/posts\/2305\/revisions\/2307"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/media\/2306"}],"wp:attachment":[{"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/media?parent=2305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/categories?post=2305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scienceandnerds.com\/wp-json\/wp\/v2\/tags?post=2305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}