Bittime - Two California men, Gabriel Hay and Gavin Mayo, have committed a massive Ethereum and Solana NFT scam. The two are accused of running a rug pull scheme that raked in more than $22 million from investors.
The case is being called the largest NFT fraud ever handled by the US Department of Justice (DOJ). Read this article to find out more!
NFT Scam: Rug Pull Scheme
Rug pull is a form of fraud with the following scheme. Developers create a crypto or NFT project and promise exciting developments, but then disappear after receiving funds from investors.
Gabriel Hay and Gavin Mayo use the Ethereum and Solana blockchains to launch various NFT projects such as Vault of Gems, Faceless, Sinful Souls, Clout Coin, and more.
Then, they promised huge profits and ties to assets like jewelry, but it turned out that the project was an NFT scam so those promises never came to fruition.
Also Read: What is NFT? Definition and How Non-Fungible Tokens Work
NFT Fraud: Arrests and Charges
The two were arrested in Los Angeles on charges of conspiracy to commit NFT fraud , two counts of electronic fraud, as well as one count of stalking.
If convicted, the two each face a maximum sentence of 20 years in prison for each fraud charge and 5 years for the stalking charge.
Also Read: Major Badge Achievement Code, Claim Your Free Profile NFT!
The Impact of NFT Fraud
According to the DOJ, these schemes not only harm investors financially, but also create distrust in the NFT ecosystem and projects.
The NFT fraud carried out by the two lasted for 3 years, from May 2021 to May 2024, targeting investors who hoped to profit from the NFT trend.
Meanwhile, the NFT fraud case is being investigated by Homeland Security Investigations (HSI) and supported by the National Cryptocurrency Enforcement Team, a special DOJ unit that handles digital crimes.
Also Read: Sad! Nike NFT Project Will Be "Completed" in 2025, Why?
NFT FAQs
What is NFT?
NFT or Non-Fungible Token is a unique digital asset that uses blockchain technology to record ownership. Unlike crypto assets, each NFT has a different value and characteristics so they cannot be exchanged for each other.
How to Buy NFT?
To buy NFTs, you need a digital wallet that supports cryptocurrency. After that, you can visit the NFT marketplace to choose and buy the NFT you want.
How to Sell NFT?
To sell an NFT, you need to upload it to an NFT marketplace. After that, set a price or auction for your NFT, then promote it to attract potential buyers.
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Reference
Jason Nelson, Ethereum and Solana NFT Scammers Charged in $22 Million Rug Pull Scheme , accessed December 23, 2024.
Decrypt, Ethereum and Solana NFT Scammers Charged in $22 Million Rug Pull Scheme , accessed December 23, 2024.
Author: IPR
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