The new Frosties NFT rug pull was able to full investors, allowing the creators to generate millions of dollars. Now, the two non-fungible token creators are charged with defrauding.
An illustration picture taken in London on December 30, 2021, shows gold plated souvenir cryptocurrency coins arranged by a screen displaying a NFT (Non-Fungible Token) logo. - Non-fungible tokens or NFTs are cryptographic assets stored on a blockchain with unique identification metadata that distinguish them from each other. (Photo by Justin TALLIS / AFP)
They fooled investors into purchasing their NFT collection. After that, they abandoned the project without returning the money of their consumers.
Right now, scams in the blockchain industry are quite common. Rug pulling, the act of receiving funds without completing the promised crypto or NFT project, is one of the most rampant fraudulent activities.
Frosties NFT Rug Pull!
According to Bloomberg's latest report, New York's federal prosecutors charged Andrew Llacuna and Ethan Nguyen of wire fraud, as well as money laundering conspiracy.
This picture taken on April 7, 2021 shows blockchain entrepreneur Vignesh Sundaresan, also known by his pseudonym MetaKovan, showing the digital artwork non-fungible token (NFT) "Everydays: The First 5,000 Days" by artist Beeple in his home in Singapore. - Last month the programmer bought the world's most expensive NFT for $69.3 million.
Also Read: Checking NFT Value: Here are the Factors To Check if a Non-Fungible Token is Worth Buying
Authorities explained that the two NFT creators were supposed to release a series of non-fungible tokens called Frosties. This new NFT collection should have provided their investors with a metaverse-based game, future NFT season passes, as well as exclusive rights to their giveaways.
"NFTs have been around for several years, but recently mainstream interest has skyrocketed. Where there is money to be made, fraudsters will look for ways to steal it," said Manhattan U.S. Attorney Damian Williams.
The two NFT scammers planned to launch another NFT collection called "Embers." However, this non-fungible token series will no longer arrive since the Los Angeles police authorities have already arrested them.
How To Avoid NFT Rug Pulls?
NFTExplained.Info reported that there are various methods that crypto fans can rely on to identify if an NFT collection is actually a rug pull.
It is suggested that if the NFT collection's website, social media, and giveaways are somehow suspicious, there's a high chance that it is a scam.
To check their legitimacy, you can rely on Google search so that you can check their social media links. On the other hand, you can also check their LinkedIn pages.
This will allow you to identify if the NFT developer is anonymous or just using a pseudonym.
Meanwhile, the Bored Ape Yacht Club creator was able to acquire IP rights to Cryptopunks and Meebits.
Shibu Inu NFT Metaverse is also quite active, announcing that it will bring the so-called Shiba Cities, Shiba Pets NFT, and other crypto content.
For more news updates about NFTs and other business tech topics, always keep your tabs open here at TechTimes.
Related Article: NFT Creators, Marketplaces Under SEC Investigation Over Securities Violations
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Written by: Griffin Davis
