On Thursday, June 30, the U.S. Justice Department slapped charges against a person promoting “Baller Ape Club” non-fungible tokens, in what appears to be an alleged rug pull scam. The U.S. DoJ has reportedly named five people involved in crypto fraud schemes which together raised more than $130 million from investors.
In a statement released Thursday, the U.S. DoJ accused a 26-year-old Vietnamese national Le Anh Tuan of committing wire fraud and international money laundering using the “Baller Ape” NFTs. The Justice Department added that Tuan was conspiring to steal more than $2.6 million from investors.
The Baller Ape Club sold the Baller Ape NFTs featuring various cartoon figures. Soon after selling the first batch of NFTs, Tuan and his fellow conspirators engaged in a rug-pull by shutting down the project and fleeing with investors’ money.
Based on blockchain analytics, the Justice Department found that Tuan and his fellow conspirators laundered investors’ money using “chain-chopping”. This is a popular method of money-laundering that involves converting a coin to other types of funds and moving them across multiple blockchains using decentralized swap services to obscure the trail of funding. If convicted, Tuan could also be facing 40 years of prison.
U.S. DoJ Unearths $100 Million Ponzi Scheme
Apart from Tuan, the U.S. Justice Department slapped separate charges against three individuals for allegedly raising over $100 million in a global Ponzi scheme. Brazil-based Emerson Pires and Flavio Goncalves have been accused of running fraudulent crypto investment platform EmpiresX. Besides, Florida resident Joshua David Nicholas has been accused of acting as a “head trader”. Speaking on the matter, U.S. Attorney Tracy L. Wilkison for the Central District of California said:
“These cases serve as a crucial reminder that some con artists hide behind trendy buzzwords, but at the end of the day they are simply seeking to separate people from their money. We will continue to work with our law enforcement partners to educate and protect potential investors about both traditional and trendy investments.”
Rug-pull scmas have increased over the last year especially in the NFT market.
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