After recruiting investors, suddenly disappearing – NFT ‘rug pull’ scam in progress.
Rug pull scams, where Non-Fungible Token (NFT) developers suddenly halt their projects and disappear with the investment funds, are on the rise. Over the past few years, multi-level marketing (MLM) scams related to cryptocurrencies have been rampant, and it seems that the realm of crime is now expanding into NFTs.
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According to the legal community, NFT-related fraud crimes have been increasing recently in South Korea as well. Hyeonsu “Elliot” Jin, the managing partner of Decent Law Firm, which specializes in virtual assets, stated, 'We have seen a rise in cases involving NFT rug pull scams recently, and the legal community as a whole is also experiencing an increase in NFT and other virtual asset fraud cases,' reflecting the industry’s sentiment.
Attorney Hyeonsu “Elliot” Jin explained, "There are various types of scams, such as developers completely disappearing after the NFT minting process, failing to deliver on promises such as listing on overseas exchanges after announcing grand plans, or vanishing from Discord communities one or two years later."
As these crimes increase, the investigative authorities have also begun to respond. On the 13th, the Supreme Prosecutors’ Office held a meeting with specialized prosecutors from local offices across the country to address 'multi-victim crimes affecting ordinary citizens,' and identified 'investment fraud related to cryptocurrency and NFT development' as one of the five major virtual asset crimes, committing to focus on combating these issues.
The problem is that since NFT rug pull scams and virtual asset-related frauds are relatively new types of crime, not only the victims but also investigative agencies and courts are struggling to respond effectively. Attorney Hyeonsu “Elliot” Jin remarked, 'Frontline investigators often struggle with understanding MetaMask (an Ethereum-based wallet) and the NFT trading process, making it challenging for both investigative agencies and courts to handle these cases properly.'
