The US Department of Justice (DOJ) has announced the arrest of two men over a conspiracy to launder money and commit wire fraud “in connection with a million-dollar scheme to defraud purchasers of NFTs advertised as Frosties.”
Suspects Ethan Nguyen (20) and Andre Llacuna (20) were accused of lying about promises that came with the purchase of their NFT collection and withdrawing money from the collection through multiple transactions. Nguyen and Llacuna were identified after they were linked with the IPs linked with Coinbase accounts that the money was withdrawn to through the NFT collection.
NFT Scam In The Making
The official report released by the DOJ details that a total of 8,888 Frosties were released at a floor price of 0.04 ETH (~US$125 at the time). All 8,888 were sold out within 48 minutes of being released making the criminals a cool 356.56 ETH (~US$1,105,000).
The report by the DOJ outlines that Nguyen and Llacuna “abruptly abandoned the Frosties NFT project within hours after selling out of Frosties NFTs, deactivated the Frosties website, and transferred approximately $1.1 million in cryptocurrency proceeds from the scheme to various cryptocurrency wallets under their control in multiple transactions designed to obfuscate the original source of funds.”
Prior to their arrests, Nguyen and Llacuna were advertising a second NFT project under the name “Embers”, which had many similarities to the Frosties NFT project. The DOJ believes that this was another “fraud scheme”.
Both of the criminals are facing serious time in relation to the scam. This goes to show although cryptocurrencies are based around anonymity, it doesn’t allow for illegal acts to stay hidden either.
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