Removing the Murky NFT Mask

Even though human beings went on to become the smartest species in the world’s history, we couldn’t remove some notable limitations on our part. One such limitation talks to our sheer inability around looking at the entire picture. We can really draw some groundbreaking conclusions from a specific part, but more often than not, we fail to asses all the relevant aspects, including the highly-critical flipside. Now, when you have no clue about the negatives, you are obviously not prepared, and that can go on to leave a devastating impact. Hence, as a way of establishing some protection against our lapses, the world would introduce dedicated regulatory bodies throughout the spectrum. Tasked with being an extension to our field of vision, these governing forces were supposed to ensure a fair structure within every possible area. Notably, while they achieved this goal, the success didn’t quite turn out to be long-lasting. This was because, following technology’s emergence, the regulators no longer had the view they needed, and therefore soon enough, we were in a reality where technology was being exploited for all sorts of purpose. Fortunately, though, recent cases suggest that the governing forces still have a lot left in the tank, and that’s exactly the impression we got from a certain judgment.

US authorities have formally charged two men over carrying out a cryptocurrency “rug pull” scheme. Named Ethan Nguyen and Andre Llacuna, the two men reportedly started an NFT business inspired by cartoon-like characters, Frosties. They’ll end up selling $1.1 million worth of NFTs, but when the time to deliver on their promises came, the duo instantly closed the business and transferred all funds to multiple crypto wallets. Apart from the payout, they had promised NFT owners various rewards, which covered stuff like providing 3D versions of their avatar, a special Frosties video game, and a lot more. Interestingly, between pulling off the scam and closing the business, the NFT creators even confessed their crime on Discord, thus freeing up the space for a barrage of complaints. The consequential investigations from Internal Revenue Service and Homeland Security will take the agencies from Ethan and Andre’s Discord data to their accounts on the Coinbase exchange. These accounts were, of course, linked with a government ID that gave away the pair’s location.

“NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development,” said IRS-CI Special Agent-in-Charge, Thomas Fattorusso in a statement. “You can’t solicit funds for a business opportunity, abandon that business and abscond with money investors provided you.”

According to certain reports, Ethan and Andre were already planning a new scheme called Embers, which was slated to launch later in March.

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