Frosties Creators arrested in connection with a $1.1M NFT rug scam

Two individuals have been accused of fraud and money laundering in connection with a cryptocurrency “rug pull” operation by US government authorities. Ethan Nguyen and Andre Llacuna are said to have made about $1.1 million. They were selling non-fungible tokens (NFTs) based on cartoon-like creatures dubbed “Frosties”.

After selling the NFTs, they shut down the project and moved the money to a number of different cryptocurrency wallets, leaving the owners of Frosties without the promised benefits. The criminal complaint states that immediately after receiving complaints about the hoax, Criminal Investigation (IRS-CI), the Internal Revenue Service, and Homeland Security Investigations (HSI) started looking into Frosties.

Frosties was a popular project whose 8,888 NFTs, each worth around $130 in Ethereum, sold out within an hour of its public introduction. When buyers attempted to resell their NFTs, they only received a few dollars in return, and many gave up hope of ever receiving the promised prizes. Most importantly, the two individuals responsible for Frosties have now been detained in Los Angeles, California. Nguyen’s purported apologies and confession to the administrator of the Frosties community Discord server are included in the complaint. In addition to advising the moderator to delete their Discord account, the message states that Nguyen offered them some Ethereum “for your difficulties.”

A follow-up series named “Embers” that was scheduled to premiere later in March appears to have been planned by the Frosties producers, who evidently maintained their confidence. The Red Cross verified receiving the $50,000 gift, but the community-controlled wallet guarantee made in Embers’ roadmap seems significantly more speculative.

Investigators compared information from Nguyen and Llacuna Discord accounts, including their IP addresses, email addresses, and contact information, with related accounts on the Coinbase bitcoin exchange. Law enforcement was able to locate the two using the Coinbase accounts that were connected to a Citibank credit card and a valid government identification. Additionally, investigators followed a string of transfers via which Nguyen and Llacuna reportedly attempted to hide the destination of the Frosties’ monies, giving rise to the allegations of money laundering.

Even the creators of the incredibly expensive Bored Ape Yacht Club series maintained their anonymity. Another example is the debut of the NFT series, which is a relatively new development. Additionally, it is not often clear what NFTs’ legal standing is. However, it is clear from the Justice Department’s publication that Frosties is a fraud. Thus, you can’t raise money for a business opportunity, shut it down, and then run off with the money.

Further Reading: Pikashow Apk