Two southern California men have been accused of defrauding people of millions of dollars. According to local media reports, authorities in Southern California have indicted two men, both 23 years old, for allegedly scamming Bitcoin investors out of almost $22 million.
The case comes just a day after reports stated that 2024 stood one of the worst years in terms of crypto scams and hacks.
Two Men Indicted for $22 Million Fraud
According to official reports, prosecutors said that Beverly Hills resident Gabriel Hay and Thousand Oaks resident Gavin Mayo are accused of soliciting investments for digital asset projects and nonfungible tokens, or NFTs, without intending to stay to see such endeavors through to completion.
The U.S. attorney’s office claims that between May 2021 and May 2024, they and an unidentified co-conspirator amassed $22.4 million through a number of “rug pull” scams, in which a token inventor or project creator withdraws investor cash and keeps the money.
In the worlds of Bitcoin and decentralized finance (DeFi), a rug pull is a scam in which engineers leave a project and take all the money with them. The phrase refers to taking investors by surprise and leaving them with coins or tokens that have no value.
Hay and Mayo allegedly misled investors by claiming that one NFT project, Vault of Gems, would be the first “to be pegged to a hard asset.” They further stated that the project would collaborate with jewelers worldwide and had “already started making [its] own exchange” for jewelry merchants to utilize.
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New Case Comes Amid Rise in Crypto Scams
The new case comes just a day after it was reported that cryptocurrency theft has steadily increased in 2024. Over the past ten years, four consecutive years have seen the theft of over $1 billion worth of bitcoin, according to a recent Chainalysis research, indicating that crypto hacking remains a significant problem.
In 2024, the concerning milestone will be reached for the sixth time, showing how the value and acceptance of cryptocurrencies rises in line with the amount that can be stolen.
The number of hacking incidents increased from 282 in 2023 to 303 in 2024, and the total amount of money taken increased by roughly 21.07% year-over-year (YoY) to $2.2 billion.
U.S. Leaders Responsible For 43% Of Global Crypto Scams
The worldwide Bitcoin market saw a troubling trend between January 2022 and October 2024. Several countries have seen the introduction of a large number of unsuccessful and fraudulent cryptocurrency initiatives, with the United States leading the way.
About 43% of all cryptocurrency frauds include American officials, placing the US in the top rank. The number of cryptocurrency companies starting in the United States, including well-known companies like FTX, is the reason for this prominence.
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