NFT Developers Plead Guilty to $400,000 'Rug Pull’, Laundering and Wire Fraud
Two NFT developers, Berman Jerry Nowlin Jr. and Devin Alan Rhoden, are facing legal repercussions after pleading guilty to charges related to a $400,000 “rug pull” scam involving three Solana NFT projects: Undead Apes, Undead Lady Apes, and Undead Tombstone. The scam targeted hundreds of investors who were enticed by the collections, initially minted at $5 apiece but quickly soaring to values as high as $360 each.
According to the Department of Justice (DOJ), the developers promoted these projects using false claims, including partnerships with prominent businesses, substantial reinvestment promises, and utility plans for NFT holders. However, just weeks after launching, the pair abruptly halted sales and severed all communication by deleting project accounts on Discord and Twitter, leaving investors with worthless assets.
To hide their tracks, the developers used the banned crypto mixer Tornado Cash and engaged in “chain-hopping,” transferring funds across different blockchains (Solana and Ethereum) to obscure the money flow before converting it to U.S. dollars. Nowlin, 21, was found guilty and faces up to five years in federal prison, with sentencing set for January 2025. Rhoden, 25, pleaded guilty in May 2024 and will be sentenced later this month.
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