The defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal.
In crypto parlance, this type of maneuver is known as a rug pull, a type of exit scam in which developers raise funds from investors through the sale of tokens or NFTs, then abruptly shut down the project and disappear with the money.
According to De.Fi's Rekt database, over $14.5 billion has been lost to rug pulls since 2011.
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