Two U.S. citizens have been found guilty of conducting a rug pull following the successful launch of NFT collections, according to a press release from the Department of Justice.
Twenty-one-year-old Berman Jerry Nowlin Jr. and 25-year-old Devin Alan Roden created two NFT collections on the Solana blockchain: UndeadApes and Undead Lady Apes.
Nowlin served as the developer for both projects, while Roden handled sales through Discord and X. The token prices rose significantly over several weeks. For instance, UndeadApes tokens increased from $5 to $360.
The defendants capitalized on the success of the first two collections and in April 2022 announced the launch of a third NFT series, Undead Tombstone. They made misleading statements, including claims about partnerships with other projects and the amount of reinvested crypto assets.
On April 19, Nowlin and Roden created 632 NFTs, after which they executed a rug pull, stealing investors’ funds and deleting their accounts on Discord and X. They obtained approximately $135,000, transferred the assets to the Ethereum blockchain, then sold and withdrew the funds in U.S. dollars to a bank account.
The total revenue from the three collections amounted to about $400,000.
Roden pleaded guilty on May 24, 2024, with sentencing scheduled for November 20. Nowlin’s sentencing is set for January 23, 2025, and he faces up to five years in federal prison.
In late October, Massachusetts prosecutors charged Alexey Andryunin, founder and CEO of market maker Gotbit, with fraud and conspiracy to manipulate the crypto market.