Frosties
From Invertopedia, the encyclopedia of how things fail
Frosties was an NFT collection that sold out on or about January 9, 2022, for about $1.1 million in crypto. Within hours its creators shut the website and moved the money to wallets they controlled[1]. Federal prosecutors in New York charged Ethan Nguyen and Andre Llacuna, both 20, in March 2022[1][6]. Nguyen later pleaded guilty to conspiracy to commit wire fraud and was sentenced to one year of probation, with a $578,899.65 forfeiture[4][5]. Llacuna was accepted into the court's Young Adult Opportunity Program, a diversion track, and the court record shows no plea or conviction[3].
Contents
The bet
Buyers thought they were buying into something that would last. Holders were promised giveaways, early access to a metaverse game, and mint passes for future Frosties seasons[1]. The NFT was the ticket; the roadmap was the reason to hold it.
All of it was paid for up front, to a team that buyers knew only by online handles[1].
What happened
| Jan 9, 2022 | Frosties sells out, raising about $1.1 million in crypto.[1][2] |
|---|---|
| Jan 2022 | Within hours the creators abandon the project, shut the website and move the money through several transactions meant to hide where it came from.[1] |
| Mar 15, 2022 | A magistrate judge in Manhattan signs a criminal complaint charging both with conspiracy to commit wire fraud and conspiracy to commit money laundering.[3] |
| Mar 24, 2022 | Both are arrested in Los Angeles. They had been promoting a second NFT project, Embers, due around March 26 and expected to raise about $1.5 million. Each count carries up to 20 years.[1][6] |
| Oct 28, 2022 | Llacuna is accepted into the Young Adult Opportunity Program.[3] |
| Mar 11, 2025 | Nguyen waives indictment and pleads guilty to one count of conspiracy to commit wire fraud. He consents to a $578,899.65 forfeiture money judgment.[4] |
| Jun 30, 2025 | Judge Ronnie Abrams sentences Nguyen to one year of probation, no prison, and a $100 assessment.[5] |
| Dec 15, 2025 | The court enters a final order of forfeiture against Nguyen, amended January 5, 2026.[4] |
The kill shot
The money arrived in full on day one, and nothing tied it to the roadmap. Once the mint sold out, there was no reason left to stay.
Prosecutors said the creators deactivated the website within hours of selling out and moved the proceeds to wallets they controlled[1]. U.S. Attorney Damian Williams put it plainly: "when it sold out, they pulled the rug out from under the victims"[1].
Nguyen pleaded guilty three years later[4][5]. When the pair were arrested, they were promoting a second project, Embers, which investigators believed was another fraud[1].
Red flags ignored
- Handles, not names. The creators sold under aliases such as "Frostie" and "heyandre."[1]
- Paid for promises. Giveaways, a game and future seasons were all bought before any of them existed.[1]
- No lock on the money. The mint proceeds went straight to wallets the creators controlled.[1]
- The next drop was already coming. Embers was being promoted within three months of Frosties going dark.[1]
The cost
About $1.1 million from buyers[1][2]. The charges carried up to 20 years per count[1]. Nguyen's sentence was one year of probation and a $100 assessment, with no prison[5], plus a forfeiture money judgment of $578,899.65, the share of the proceeds the court record says he personally obtained[4].
Llacuna was accepted into the court's Young Adult Opportunity Program, a diversion track, in October 2022. The court record shows no plea or conviction[3].
The inversion
Before you mint, find out who the team is and what happens to the mint money. If it lands in their wallet on day one with nothing holding it to the roadmap, you are paying for a promise.
What survived
The holders. Victims built Wrapped Frosties, a separate project with a similar look on a new smart contract meant to be transparent[2].
The arrests came about two days before Embers was due to launch[1]. IRS-CI's Thomas Fattorusso said, "You can't solicit funds for a business opportunity, abandon that business and abscond with money investors provided you"[1].
References
- ^ “Two defendants charged in non-fungible token (NFT) fraud and money laundering scheme”. U.S. Attorney's Office SDNY release, via IRS Criminal Investigation, March 24, 2022. The January 9 sell-out, the $1.1 million, the promises, the abandonment and fund moves, the aliases, the charges and penalties, Embers, the Los Angeles arrests, the Williams and Fattorusso quotes.
- ^ “Frosties NFT Scheme Leads to Fraud, Conspiracy Charges for 2 Men: DOJ”. Newsweek, March 24, 2022. Nearly $1.1 million raised, the January 9 sell-out, and Wrapped Frosties.
- ^ “United States v. Nguyen, No. 1:22-mj-02478 (S.D.N.Y.)”. CourtListener (RECAP) docket, 2022-2025. The March 15, 2022 complaint, Llacuna's acceptance into the Young Adult Opportunity Program on October 28, 2022, with no plea or conviction entered.
- ^ “United States v. Nguyen, No. 1:24-cr-00671 (S.D.N.Y.)”. CourtListener (RECAP) docket, 2025-2026. Nguyen's March 11, 2025 waiver and guilty plea, the $578,899.65 consent forfeiture money judgment, and the final forfeiture orders.
- ^ “Judgment in a Criminal Case, United States v. Ethan Nguyen, S1 24 Cr. 671 (RA)”. U.S. District Court, S.D.N.Y., June 30, 2025 (filed July 1, 2025). Guilty plea to conspiracy to commit wire fraud (18 U.S.C. 371); one year of probation, no prison, $100 assessment, forfeiture.
- ^ “DOJ cracks down on 'rug pulls,' charging Frosties NFT project founders”. Cointelegraph, March 25, 2022. Both defendants were 20 and arrested in Los Angeles.