Pair arrested for $1.1 million NFT scam

NFT-related scams have been on the rise lately; finally, authorities in the US arrested two over an alleged rug pull involving NFT assets.

NFT Projects: Good or bad?

More than once, we’ve witnessed NFTs being used as a tool to scam, steal, or launder money. Each time an NFT scam gets uncovered, it does great harm to the NFT and Web3 community as it gives naysayers and Web3 skeptics another reason to attack the movement.

Some projects are created with good intentions but fail or do not live up to expectations after a while. On the other hand, we have NFT projects created to defraud investors, collaborators, and everyone in between.

What if we told you that one of the most successful and highly sought-after NFT projects was run as a money grab to defraud the public. You may be familiar with the “Frosties” NFT project; this project sold out within an hour of launch; this project was run as a scam by the people behind it, and shortly after selling out, the founders shuttered the project.

A “rug pull” in the NFT space is when a project is launched and advertises to attract investors; as soon as investors sign up and assets change hands, the team either shuts the project down or disappears. If you’re on the receiving end, it feels like someone convinced you to stand on a rug, then pull it as soon as you’re on it.

Authorities Charge “Frosties” Founders with NFT scam

US government prosecutors charged Ethan Nguyen and Andre Llacuna with fraud and money laundering relating to its rug pull incident. The pair allegedly earned $1.1 million through the sale of NFT tokens for their Frosties project – Frosties are cartoon-like characters.

More here.

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