U.S. Department of Justice Charges Two Crypto Traders Over Alleged $1,100,000 “Frosties” NFT Scam
The U.S. Department of Justice (DOJ) is filing charges against two crypto traders over their alleged involvement in facilitating the $1.1 million “Frosties” non-fungible token (NFT) rug-pull scam.
According to a new press release from the DOJ, Ethan Vinh Nguyen and Andre Marcus Quiddaoen Llacuna were both charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
Nguyen and Llacuna allegedly advertised NFTs called “Frosties,” which allegedly granted holders eligibility for giveaways, early access to a metaverse game and exclusive mint passes to upcoming Frosties seasons – among other things.
After selling out of Frosties in early January, however, Nguyen and Llacuna allegedly deactivated their website and abandoned the project. They also transferred about $1.1 million worth of crypto from the project to various wallets under their control, according to the DOJ.
Prior to being arrested in Los Angeles, Nguyen and Llacuna were also allegedly gearing up to launch the second round of fraudulent NFTs called “Embers.”
Both the wire fraud charge and money-laundering charge carry maximum sentences of 20 years in prison.
Says Thomas Fattorusso, special agent in charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation,
“NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development.
You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you.”
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