Two alleged operators of the Frosties NFT rug pull have been arrested and charged by US law enforcement.
The US Department of Justice (DoJ) said on Thursday that Ethan Nguyen and Andre Llacuna have been charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
The pair, both 20 years old, allegedly operated “Frosties,” a Non-Fungible Token (NFT) project that, at the outset, looked professional and offered quirky cartoon art.
However, as documented by Protocol, investors who handed over cryptocurrency to purchase the NFTs in January this year were alerted to a potential scam when the Frosties Discord server vanished alongside the original project’s Twitter profile, having briefly displayed the message, “I’m sorry.”
Rug pulls are along the same vein as exit scams performed by cryptocurrency exchanges and projects in recent years or pump-and-dump meme stock activities.
You ramp up a project, share, or service, dangle the prospect of making money or package up an initiative as an exciting and trustworthy project, and once investors have been reeled in and have parted with their funds, you take the cash and vanish.
Rug pulls aren’t commonly seen in the NFT space, but as the trade of these tokens rises