We had talked about how the concept of NFTs, while not inherently scam-worthy, has been nothing but an avalanche of scam projects and exploitation. For the longest time, there had been no justice given to those who have been wronged by an NFT scam and for many who worked on them, it seemed like there never would be.
However, in March of this year, two individuals who had created numerous NFT scams, Ethan Nguyen and Andre Llacuna, finally were brought to the courts for their numerous scams. Their charges are so severe that they are potentially facing up to 40 years in prison for their efforts.
This is a staggering number.
It is evident through the potentially devastating sentence that the Department of Justice had not only been looking into cases of NFT scams, but wanted to make an example out of the two they were able to catch.
If their intent was to scare others straight, it worked.
There were so many scams, or rug pulls as they were called, in the NFT space that covering them all would be insane. Therefore, I will only cover the craziest.
While the case of this first one wasn’t directly due to the litigation, it is absolutely one of the highlights from an artistic standpoint. Be prepared to find out why.
Like most, it started with an idea. That idea being the creation of NFT monsters thatwhich would eventually be usable in a video game. While the initial premise was tantalizing to many, there was a curious caveat that people would not view as a downside until much later: you never knew what the monster looked like. Each of the monsters that were sold were sold as eggs each barely distinguishable from the other. While it is fairly typical for NFT art to look incredibly similar to one another with only the smallest of changes, this was a design decision by the runner of the collection whom I will not name. This creator of the collection went on many tirades about how valuable these eggs would be and that the monsters inside them would be incredibly valuable too. Interesting tidbit about our creator friend here: he never told the public who he was and what credentials he had. People who asked would be given a wide variety of answers that would help them put together the process.
Eventually, however, the scales fell from the eyes of the public. The concept of the NFTs was that eventually, while they were currently eggs, they would hatch to become monsters that you can use in a game that the creator claimed would be made soon. Then, the eggs hatched, revealing the horrid abominations inside.
Some straight up did not function properly. They were sideways clipping into the ground, others were completely upside-down. However, those whose monsters came out correctly were disgruntled by the result. It would be putting it lightly to say that you could probably make better models in your sleep. An infamous chimp monster NFT looks like an experiment where they had a monkey make offspring with itself in a horrible circle of a family tree.
But obviously, that isn’t the end of the story. After a period of silence by the creator after people began hatching their eggs, someone legitimately hunted down the actual name of the creator as well as their background. In short, they found it. After that, the creator decided to make a public statement as well as officially reveal some personal details, including his face and name. He vowed to continue working on it until people were satisfied.
That’s a funny case, but one not caused by the lawsuit since most of the events of that one occurred before the lawsuit. What was pushed to happen after it however, was this noteworthy example.
Bored Bunnies was promoted by a number of influencers whose impact affected millions of dollars and hundreds of people. Those influencers include but are not limited to: Floyd Mayweather and Jake Paul, both of whom are known to have profited themselves from the scam. They eventually rug pulled (again, another term for scam) the entire project and ran away with the money.
That is … until the litigation went through and all of a sudden the magic returned! They stated that they were merely putting things together and that they hadn’t scammed anyone! This was despite all of their actions appearing on the blockchain, and thus all of their scammy behavior being broadcasted for all to see. To get an idea of how quickly they reacted to the lawsuit, it was literally only a handful of days after its release until they said anything. It was so blatant that news media covered their return as well.
Overall, the increased oversight of NFTs is nothing but a good thing for investors. Honestly, the space is inundated with stories like these two. I have only touched upon some of the lighter scams. Losing that much money for any person is a devastating ordeal. To lose it over art or promises for further developments is heartbreaking to see. Now, there is a chance for justice.
Edward Park is a fourth-year Secondary Education (English) major. EP909756@wcupa.edu