Scammers are getting in on the NFT gold rush.
One such scheme came to an end last week when U.S. law enforcement arrested two 20-year-old men, Ethan Vinh Nguyen and Andre Marcus Quiddaoen Llacuna, in Los Angeles in connection with an alleged $1.1 million NFT fraud.
In January, the two launched an NFT collection called Frosties, releasing 8,888 ice cream scoop cartoon characters that sold out within an hour on OpenSea. They promised investors in the project early access to a related metaverse game and other perks, including the ability to “breed” new Frosties from existing characters.
Instead, less than an hour after the January 9 drop, Nguyen and Llacuna promptly abandoned Frosties, shutting down its website and 25,000-member Discord channel, and transferring all the funds into their own cryptocurrency wallets. Such a scam is known as a “rug pull,” where the creators of an advertised NFT or gaming project stop working on the release, but keep investors’ money.
