On January 9, an ice cream-themed NFT project called "Frosties" made off with $1.1 million in a rug pull only an hour after the NFTs were launched. Less than three months later, the U.S. Attorney's Office for the Southern District of New York announced that they had charged the two 20-year-old individuals behind the scheme with conspiracy to commit wire fraud and conspiracy to commit money laundering. Although it is bizarrely common to see people question whether NFT rug pulls are actually crimes, the USAO was quite clear: "Rather than providing the benefits advertised to Frosties NFT purchasers, Nguyen and Llacuna transferred the cryptocurrency proceeds of the scheme to various cryptocurrency wallets under their control." The Special Agent in Charge stated, "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."The statement also alleged that the duo were working on another NFT project called "Embers", which they hoped would generate around $1.5 million. The project was set to mint on March 26, and the 60,000-member Discord has been thrown into disarray. Some of the community moderators began deleting links to the D.O.J. announcement, and attempted to suggest that the Department of Justice website had been faked to "FUD" the project.
The individuals behind the Frosties scheme face charges that each carry a maximum sentence of 20 years in prison, if they are convicted.
