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This is not a happy story. But I can't get it out of my head.
Earlier this month, it was I mentioned Ann Berman Nolen, 21, Alabama resident - convicted Of wire fraud and money laundering charges over NFT rug raffle in 2022 – he died by suicide.
A district court in Florida had found him guilty just three weeks earlier. He was scheduled to be sentenced later in January, and faces a maximum sentence of five years in prison.
The name of the rug in question refers to a project inspired by the short-lived Bored Apes Undead Ape Societywhich included three NFT collections released over the course of two months.
Nowlin has been described as the developer who coded the smart contracts.
Another person, Devin Rhoden, ran the art form engine for NFTs. Rhoden is a 23-year-old senior pilot in the US Air Force who worked as a cyber analyst.
Here's the timeline as presented in court filings:
March 2022: 2,500 Undead Apes NFTs were minted on Solana for 0.05 SOL each (about $10,000 at the time). The UndeadApes were unique apes with over 60 hand-drawn themes on the Solana blockchain. Ready to take on the Metaverse.
Later March 2022: 750 Undead Lady Apes were minted on Solana for 0.75 Sol each (~$53,400). These had the supposed DeFi functionality - stakeholders would earn up to 6x, 75% of the proceeds would go back to the liquidity pool, while the rest would go to paying the team.
April 2022: The minimum prices for the initial Undead Apes sets reached 3.6 soles (about $400) and 6 soles ($660) respectively. In terms of SOL, this equates to 72x and 8x on initial mint prices.
Later April 2022: A third mint has been announced for Undead Tombstones, featuring a collaboration with Stoned Monkey Crewan unaffiliated project, allegedly drove up mint prices.
Tombstones are said to come with additional features for existing Undead Apes holders that could generate additional ROI.
After 2 hours: the Stoned Monkey Crew He denies any partnership or involvement with him Undead Ape Society. the Undead apes The team abandoned the mint soon after — taking the proceeds — and the minimum prices for all relevant NFTs immediately dropped by 85%.
Then Discord members received a message from Rhoden Undead Ape Society conversation Saying, "You're stupid as fuck."
Authorities traced profits from the rug sweep to $161,548, which were converted into U.S. dollars and split equally between Nolan and Rhoden's bank accounts.
Given the evidence presented by prosecutors, it appears there was a plan for the rug all along. The Feds were initially informed by another member of the Air Force who lost money in the scheme.
However, there are two things that haunt me. The first thing is the relatively low amount of money extracted from the rug pull process.
I may have become desensitized to much larger fraud cases over the years, but it was still enough for Rhoden to receive five years' probation after pleading guilty, and his testimony is said to have led to the conviction of Nolen, now deceased.
The other is that Nowlin has been diagnosed with autism. His family described him as above average when it came to intelligence, but he had the emotional maturity of a 14-year-old. He reportedly taught himself programming and spent most of his time online, playing video games and chatting in Discords.
There is a lot about cryptocurrency that is larger than life, often larger than any life we could ever imagine. but Undead apes Pulling the rug was none of that.
Naturally, people lost money very quickly. Who knows what would have happened if the team had actually followed through on its promises. Most likely, they would have lost money.
Reading about rug pulls usually comes with some schadenfreude. The perpetrators are caught in all sorts of ridiculous circumstances, making for compelling crime stories.
Fraud is bad and bad actors need to be caught. This is what happened with Undead apes Pull the rug. But sadly, it now serves as a dark reminder that although money and assets are silly and digital, the stories are painfully real.
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