Two Defendants Charged In a $1M NFT Fraud Scheme

Two Defendants Charged In a $1M NFT Fraud Scheme


  • The 2 defendants have been intercepted within the strategy of promoting a second set of NFT marketed as “Embers,” valued at roughly $1.5 million. 
  • Given the meteoric rise of NFTs, the necessity for correct authentication and safety arises. 

Two defendants Ethan Nguyen, alias Frostie, and Andre Llacuna, alias heyandre have been charged in a $1 million NFT fraud scandal. In accordance with a doc by the US DoJ, the NFT fraud scheme was introduced down by a multi-agency group. Reportedly, the 2 defendants have been intercepted within the strategy of promoting a second set of NFTs marketed as “Embers,” valued at roughly $1.5 million. 

The multi-agency group that concerned the IRS has proven its dedication to crypto rules. Furthermore, NFTs are in a unique sort of market though using the crypto market. U.S. Lawyer Damian Williams mentioned:

NFTs have been round for a number of years, however not too long ago mainstream curiosity has skyrocketed. The place there may be cash to be made, fraudsters will search for methods to steal it. As we allege, Mr. Nguyen and Mr. Llacuna promised buyers the advantages of the Frosties NFTs, however when it offered out, they pulled the rug out from underneath the victims, nearly instantly shutting down the web site and transferring the cash. Our job as prosecutors and legislation enforcement is to guard buyers from swindlers on the lookout for a payday.

IRS-CI Particular Agent-in-Cost Thomas Fattorusso mentioned that the identical guidelines for monetary funding will apply to NFTs. Fattorusso famous;

You’ll be able to’t solicit funds for a enterprise alternative, abandon that enterprise and abscond with cash buyers supplied you. Our group right here at IRS-CI and our companions at HSI carefully observe cryptocurrency transactions in an effort to uncover alleged schemes like this one,

Additional notes by the multi-agency group on the NFT market and scams

Given the meteoric rise of NFTs, the necessity for correct authentication and safety arises. Notably, NFTs are intangible property that reside on the blockchain. Hereby, the general safety of a blockchain reciprocates to higher safety for NFTs. However, scammers have developed new methods to get into peoples’ wallets with out hacking. 

Furthermore, with large earnings skilled within the crypto market, greater probabilities of dangerous gamers skyrockets.

HSI Performing Particular Agent-in-Cost Ricky J. Patel said: “The trending market and demand for NFT investments has not solely drawn the eye of actual artists, however rip-off artists as nicely.”

The NFT market has been marred with individuals utilizing pseudonyms to cover their identities. As such, buyers have simply duped off their cash.

HSI New York’s Darkish Internet & Cryptocurrency Activity Pressure labored carefully with our IRS-CI companions to establish and shut down these fraudsters as they ready to launch the sale of one more NFT undertaking that will have probably scammed numerous others,

USPIS Inspector-in-Cost Daniel B. Brubaker mentioned that the fast-growing crypto market is bringing new phases of fraud schemes.



Leave a Reply

Your email address will not be published.