On Wednesday, October 12, five crypto scammers in France faced allegations of collaborating in a phishing scam and were consequently charged. Allegedly, the suspects have audaciously acquired and resold $2.5 million worth of blue chip non-fungible tokens (NFTs). The phishing scam prominently targeted Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) owners.
As per the prosecution, the alleged suspects leveraged a phishing scam in order to steal the assets, enticing victims through a fake website, while promising to animate their NFTs, reports Agence France Presse (AFP) in a post by Barrons.
The charged suspects aged between 18 and 24, are residents of Paris, Caen, and Tours. Two of the five scammers are charged with manufacturing the fraudulent phishing site that enabled the theft. The rest three were accused of taking charge of advertising and money laundering aspects of the phishing, says deputy chief of France’s cyber-crime authority, Christopher Durand.
The prosecution charges included “fraud committed as a part of criminal gang, concealing fraud and criminal association.”
The subjects have been placed in pre-trial detention by the French authorities, along with their parents. The parents of one of the accused have also been arrested, but later they were released without charge.
The deputy chief says that the probe was initially started as a result of an investigation by well-known Twitter user “ZachXBT"
ZachXBT, describing himself as an “on-chain sleuth" in a blog post mentioned how the Twitter user “Dilly Dilly" had clicked on a link shared by “a verified member of the BAYC Discord" and consequently had his BAYC NFT stolen after approving a transaction on website that “he was lead to believe would produce an animated version” of his NFT.
ZachXBT claims that after selling the stolen tokens on the NFT marketplace Opensea, the accused tried to hide the tracks by using the now-sanctioned Tornado Cash protocol.
A report by blockchain analytics firm Elliptic suggests that over $100 million worth of NFTs being stolen between July 2021 and July 2022. Along with these recent incidents, NFT fraud seems to be rapidly booming in general and thus has sparked security concerns.
This news sees the light of day when the firm behind the Bored Ape collection, Yuga Labs is under investigation for its business practices. Although the organization has not yet been charged with any misconduct, the Securities and Exchange Commission (SEC) is now investigating the start-up, to check if the anonymous sources reported by Bloomberg are true.
