Two California Men Indicted for $22 Million NFT “Rug Pull” Schemes  

Two 23-year-old males from Southern California, Gabriel Hay from Beverly Hills and Gavin Mayo from Thousand Oaks, have been indicted for allegedly defrauding traders of over $22 million by a number of non-fungible token (NFT) “rug pull” schemes. 

The time period “rug pull” refers to selling a venture to draw investments, just for the creators to desert it and disappear with the funds.  

Between Could 2021 and Could 2024, Hay and Mayo launched a number of NFT initiatives, taking cash from traders with out fulfilling their guarantees. 

One notable venture, Vault of Gems, concerned 5,000 NFTs minted on the Ethereum blockchain. The venture’s social media presence resulted in November 2021, with many feedback from customers alleging they’d been scammed.  

The Vault of Gems venture was solely one in all many. Different ventures linked to the pair embrace Faceless, Sinful Souls, Clout Coin, Soiled Canines, Uncovered, MoonPortal, Squiggles, and Roost Coin. In complete, these schemes allowed them to amass $22.4 million from unsuspecting traders.  

Now, each Hay and Mayo face fees, together with one rely of conspiracy to commit wire fraud, two counts of wire fraud, and one rely of stalking. If convicted, they might every resist 20 years in jail for the conspiracy and wire fraud fees and a further 5 years for stalking.  

This case is a part of a rising pattern in NFT-related scams. Information from DappRadar reveals that losses from crypto-related frauds, hacks, and scams elevated by 5% in 2024, totaling $430 million.  

Different latest NFT fraud circumstances spotlight the widespread subject. In June, three UK nationals behind the “Advanced Apes” NFT assortment have been charged within the US with wire fraud and cash laundering. 

Equally, in January, a US Air Drive analyst, Devin Alan Rhoden, was accused of orchestrating a “rug pull” with the UndeadApes venture, leading to fees of cash laundering and false statements.