With the enduring popularity of certain NFTs and the promise of their use in the metaverse and beyond, the hype around the new technology has been accompanied by rising concerns over NFTs being the centerpiece of traditional financial crimes like money laundering and wire fraud. For example, on June 30th, 2022 the Justice Department indicted six individuals in four separate cryptocurrency fraud cases, which altogether involved over $130 million of investors’ funds. These indictments include allegations of a global Ponzi scheme selling unregistered crypto securities, a fraudulent initial coin offering involving phony associations with top companies, a fraudulent investment fund that purportedly traded on cryptocurrency exchanges, and the largest-known Non-Fungible Token (NFT) money laundering scheme to date.
In one of these cases, the defendant, Le Anh Tuan, a 26 year-old Vietnamese national, was charged in California with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering involving “Baller Ape” NFTs. (U.S. v. Tuan, No. 22-cr-273 (C.D. Cal. Indictment June 28, 2022)). Seeking to capitalize on the popular Bored Ape Yacht Club, the defendant launched the Baller Ape Club, featuring “Baller Ape” NFTs featuring figures in various attires decorated with colorful accoutrements. According to the indictment, Tuan and unnamed co-conspirators first gained access to investors’ digital wallets and…
