US law enforcement officials are lauding Blockchain Intelligence Group for the crypto investigative firm’s “significant collaboration” with federal officers probing the Frosties NFT collection rug pull.
Blockchain Intelligence Group’s role, officials said in a statement on Monday, resulted in the first federal arrest pertaining to an alleged NFT scam and prevented “additional victims from being defrauded.”
Federal authorities awarded Blockchain Intelligence Group’s parent company, the publicly traded BIGG Digital Assets, the Homeland Security Investigations’ annual “private sector partnership award,” they said. Firm executives and employees were recognized in a ceremony at New York’s John Jay College of Criminal Justice on Friday.
Blockchain Intelligence Group CEO Lance Morginn accepted the honor on behalf of the company, according to the company. It was bestowed by Ivan J. Marvel, who holds the title of special agent in charge for the New York unit of Homeland Security Investigations (HSI).
The Frosties scam is said to have resulted in NFT holders being defrauded of as much as $1.3 million in early 2022. At the time, the ruse was indicative of rising proliferation of bad crypto actors in a bullish digital collectibles space.
Frosties are a “cool, delectable, and unique” NFT collection, according to its OpenSea page, which lists the 8,888 total Frosties minted.
Ethan Vinh Nguyen and Andre Marcus Quiddaoen Llacuna were charged by the Department of Justice in relation to the rug pull, which was previously reported by Blockworks. The previous account cited sources, including interviews with Frosties holders who said they were defrauded, in breaking the news.
In the statement on Monday, Morginn said that when the Blockchain Intelligence Group “identified suspicious behavior occurring over social media channels relating to what appeared to be an apparent rug pull involving the Frosties NFT” and notified law enforcement “without hesitation.”
The blockchain tracing specialist then teamed up with law enforcement officials, Morginn said, and “quickly tracked and traced the flow of funds as well as the NFT all on one graph.”