Tyler Cross
Published on: January 2, 2025 Senior Writer

Two California men were arrested and accused of fraudulent NFT rug pulls that cost victims a total of $22 million.

Gabriel Hay of Beverly Hills and Gavin Mayo, both 23 years old, ran a series of scam projects from May 2021 to May 2024, including Faceless, Vault of Gems, and more. They created websites and roadmaps, and spoke to investors, promising that their projects would see long-term support, only to pull the rug every time and leave investors empty-handed.

A rug pull is a term in the crypto world for when a scammer promotes a new project as an enticing way to make money to steal investor assets and run away. In this case, the enticing reward was non-fungible tokens (NFTs).

NFTs are digital identifiers that denote ownership over part of a blockchain. While they’re not inherently malicious, it’s easy for scammers to promote NFT projects and then rug-pull investors.

They became especially popular among investors due to their high volatility and ability to make sizable returns. Unfortunately, the landscape has very little government oversight and is riddled with scammers looking to take advantage of people who want to make a quick buck.

The criminal duo’s actions were so brazen that they attracted the attention of Homeland Security Investigations (HSI). After the investigation began to unravel the boy’s plot, they were arrested and charged with conspiracy to commit wire fraud, wire fraud, and stalking.

“For three years, Hay and Mayo apparently lied to their investors in order to defraud them out of millions of dollars,” said HSI Executive Associate Director Katrina W. Berger. “Such technological fraud schemes cost investors millions of dollars every year. Just because such crimes aren’t violent does not mean they are victimless. HSI will continue to investigate, disrupt, and dismantle such cryptocurrency fraud networks.”

Each count of the wire fraud-related charges carries a maximum sentence of 20 years, while the count of stalking can be up to five additional years. It is the largest NFT scam to be taken down so far and may mark a turning point in beating crypto scammers.