$22m NFT fraud and harassment campaign lands two Californians in court

Two California men person been charged successful the largest NFT fraud lawsuit ever prosecuted, accused of defrauding investors of implicit $22 cardinal done deceptive schemes.

According to a six-count indictment unsealed successful Los Angeles, Gabriel Hay, known by aliases specified arsenic “Mr. Handz” and “Vaultkeeper,” and Gavin Mayo, known arsenic “Gavinm,” launched fraudulent projects similar Vault of Gems and Faceless.

They promised investors lucrative returns utilizing fabricated claims and fake task roadmaps.

Vault of Gems was marketed arsenic the “first NFT task pegged to a hard asset,” with its website falsely claiming the task would alteration users to speech NFTs for carnal jewels done a planetary web of jewelers.

Despite these promises, the defendants abandoned the task aft collecting implicit $1 cardinal successful funds, funnelling the proceeds into their idiosyncratic accounts.

The indictment besides details however the brace utilized aliases and hired others to conceal their engagement successful the schemes.

When a whistleblower linked them to the Faceless project, Hay and Mayo launched a harassment campaign, sending messages threatening the idiosyncratic and their family.

The indictment states that their actions “caused important affectional distress” to the whistleblower, including emails falsely purporting to beryllium from a instrumentality steadfast that threatened ineligible enactment and made explicit threats against the individual’s parents.

Hay and Mayo look charges of conspiracy to perpetrate ligament fraud, ligament fraud, and stalking, which transportation maximum sentences of implicit 60 years if convicted.

This lawsuit comes amid renewed involvement successful NFTs, with surging prices for blue-chip collections similar CryptoPunks and Bored Ape Yacht Club.

Just 2 weeks ago, authorities unopen down 40 fraudulent NFT minting domains targeting artists crossed the US.

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email astatine [email protected].