A six-count indictment was unsealed today in Los Angeles charging two California men with defrauding investors of more than $22 million in cryptocurrency through a series of digital asset project “rug pulls,” a type of fraud scheme in which the creator of a nonfungible token (NFT) or other digital asset project solicits funds from investors for the project and then abruptly

According to court documents, from May 2021 to May 2024, Gabriel Hay, 23, of Beverly Hills, and Gavin Mayo, 23, of Thousand Oaks, sponsored several NFT and other digital asset projects and undertook promotional activities in support of those projects. Hay and Mayo allegedly made or caused others to make materially false and misleading statements regarding the digital asset projects being launched and provided false and misleading project “roadmaps” detailing plans for the NFTs or other digital asset projects after their launch that the sponsors never intended to fulfill. For example, the indictment alleges that in promoting the Vault of Gems NFT project, Hay and Mayo falsely claimed that the project would be the “first NFT project to be pegged to a hard asset.” However, instead of pursuing the Vault of Gems project or others as they had represented they would, Hay and Mayo allegedly abandoned the projects after collecting millions in funds from investors.