Five people in France have been charged with stealing $2.5 million worth of non-fungible tokens (NFTs). They mostly went after owners of the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) (MAYC).
According to a report from Agence France Presse (AFP) that was posted by Barrons, the suspects got the assets through a phishing scheme in which they used a fake website that promised to animate the victims’ NFTs to trick people into giving them their money.
All of the suspects are between 30 and 24 years old. They are being charged with “include fraud committed as part of a criminal gang, concealing fraud and criminal association.”
The plan was carried out between late 2021 and early 2022 by people who lived in Paris and the French cities of Caen and Tours.
AFP says that two of these people, who were said to be in charge, are being held in jail before their trials. One of the accused person’s parents was also taken into custody, but they were later let go without being charged.
Christophe Durand, who is the deputy head of the French cybercrime unit OCLCTIC, says that a popular Twitter user named “ZachXBT” started a grass-roots investigation that led to the investigation.
ZachXBT calls himself a “on-chain sleuth” and a “rug pull survivor turned 2D detective.” His over 300,000 followers trust him to look into crypto and NFT fraud cases.
In a blog post, ZachXBT wrote about his investigation and how Twitter user “Dilly Dilly” had his BAYC NFT stolen after clicking on a link shared by “a verified member of the BAYC Discord” and approving a transaction on a website that “he was led to believe would produce an animated version” of his NFT.
He said that after selling the stolen tokens on the NFT marketplace OpenSea, the accused tried to hide their tracks by using the now-legal Tornado Cash protocol.
Even though the total value of digital assets is much lower than it was at its peak, NFT fraud seems to be on the rise.
A report from blockchain analytics company Elliptic says that between July 2021 and July 2022, more than $100 million worth of NFTs were stolen.
The news comes at a time when Yuga Labs, the company behind the Bored Ape collection, is being looked into for how it runs its business.
Even though the company hasn’t been officially accused of doing anything wrong, Bloomberg cites unnamed sources who say that the Securities and Exchange Commission (SEC) is looking into the start-up.
The report says that the watchdog is looking into whether the company broke any federal laws by giving out NFTs that work like stocks.
The SEC is also said to be looking into how YugaLab’s Ethereum-based ApeCoin is being distributed.