Boneheads, indeed

May 13, 2024 5:28 AM

“I knew we were right. I knew we had done our work. I knew the case was iron tight.” (slTorontoStar) (archived link here)

For the victims of the alleged Boneheads scam, it was either McRae-Yu and his rookie lawyer or no one. (Canadian police, unlike their counterparts in the U.S., have shown little interest and even less aptitude when to it comes to investigating this kind of scam.)

posted by Kitteh (22 comments total)

I gotta admit I don't care a fig for the NFT/crypto grift but the fact these two con artists are from the next city over to me made it interesting!
posted by Kitteh at 5:29 AM on May 13

I think this is the first article that let me actually understand the NFT thing, weirdly. I had always thought they were just paying for the digital object; I hadn’t realized the digital objects were being used as access tokens to rich-people community, like digital country clubs.
posted by corb at 6:20 AM on May 13 [4 favorites]

“And I was getting rug-pulled left and right, and I was just thinking, there is absolutely no oversight in this space. There is very little regulation that’s happening.”

I thought that was the point of crypto, at least according to the crypto-bros.
posted by thecjm at 6:27 AM on May 13 [10 favorites]

ditto corb’s comment above: i also did not realise nfts were tied to additional perks/assets. interesting read!
posted by tamarack at 6:41 AM on May 13 [1 favorite]

The digital country club aspects only started when the grift of just selling people digital tokens representing some image or video started running out of gas. That's when NFTs transitioned from "buy this imaginary tulip bulb" to "buy this imaginary tulip bulb and gain access to exclusive privileges".
posted by RonButNotStupid at 6:48 AM on May 13 [19 favorites]

I think the NFT to serve papers approach is very interesting. The probable respondents are still maintaining that they are not actually the respondents, but if it's digital assets they're going after in the case, maybe it doesn't matter if they ever identify the actual holders of those assets as long as they can demonstrate that the assets themselves are derived from the original fraud.

It seems like they don't really expect to actually get the assets anyway, they're just trying to advance the law, which is a noble undertaking all on its own.
posted by jacquilynne at 6:51 AM on May 13 [3 favorites]

I think the "token = membership" is a later addition to NFT apologia. Initially it was sold as a way to monetize digital art. BAYC was an outlier in that it had events and such for NFT owners and that was never the selling point. Now that the bottom has fallen out they're desperate to find an actual value prop and tying their virtual token to tangible real-world benefits is so hugely ironic
posted by thecjm at 6:51 AM on May 13 [6 favorites]

Computers and what computers can do have been part of our lives for so long, I still find it wild and infuriating that most law enforcements agencies still have the mindset of "what happens online isn't real so I don't know what you expect us to do about it."
posted by Kitteh at 7:01 AM on May 13 [9 favorites]

It’s weird, because the membership thing makes more sense than the art thing. The NFT is a token of ownership, not the ownership itself. So the people trading apes are really just trading links that point to the ape, with some understanding that you can use that ape until the link goes dark. Since a membership is almost always temporary, I guess an NFT works as proof, although things like keys and contracts (since membership groups are, almost by definition, centralized) make considerably more sense. Of course, the NFT burns resources unnecessarily to even exist, but so does a country club….
posted by GenjiandProust at 7:02 AM on May 13

I feel like an issue here is that $4 million is a lot of money for one scam or one person but not a lot of money when you're talking about starting a business with a physical store in New York with high end objects that you design and have made. If someone said to me, "with four million dollars I am going to open a store in NYC selling custom art toys, make and distribute clothing and do a bunch of other stuff which will require paying a number of people a living wage, plus give away one million of it to the punters and take a glamorous profit", I would have trouble believing them, even though if I had four million dollars I'd make generous presents to all around me, donate to worthy causes and use the remainder to retire.

I mean, I'm confident that you could start a business (and then it would fail! what dumb and awful art!) with that money, but the whole NFT thing was about promising massive profits and lots of glitz. Many people do not understand how expensive things are. I used to have a job with an event-planning component, and we'd blow through $15,000 easily for a relatively small catered event lasting three hours for about 125 people...and this was ten years ago. The idea that you're going to have lots and lots of stuff and spaces for lots and lots of people at a very high standard for $2,750,000 is laughable.
posted by Frowner at 7:11 AM on May 13 [7 favorites]

Computers and what computers can do have been part of our lives for so long, I still find it wild and infuriating that most law enforcements agencies still have the mindset of "what happens online isn't real so I don't know what you expect us to do about it."

At least part of it is 'what happens online can't demonstrably be shown to have happened in my jurisdiction, so I don't know what you expect us to do about it.'

But yeah, dealing with cops for online things is a pain in the ass. When I was a community manager, someone used my website to make what seemed like pretty credible threats of violence against one of their customers who had left a bad review and on the advice of our counsel, I called the police in the location of the restaurant to try to report it. But convincing a Jackson, Mississippi desk cop that a person in Canada calling about a post on a website based in San Francisco had real information about a threat that might go down in Jackson was impossible. That was earlier in the internet era, but not early, early. It has improved since then in some places, but not everywhere.
posted by jacquilynne at 7:13 AM on May 13 [3 favorites]

the digital objects were being used as access tokens to rich-people community, like digital country clubs.

NFTs were mostly being used with the promise of access to rich-people community. Most (or indeed all) of them didn't actually do that. "rugpulls" are ones that didn't maintain the scam long enough for the initial buyers to offload their tokens onto the next set of marks.
posted by BungaDunga at 7:52 AM on May 13 [2 favorites]

> When I was a community manager, someone used my website to make what seemed like pretty credible threats of violence against one of their customers who had left a bad review and on the advice of our counsel, I called the police in the location of the restaurant to try to report it.

That doesn't look like a police problem.

There is no damage to the property of a member of the upper class, no violation of the state monopoly on violence against a peon, no disrupting commerce at a location owned by a member of the upper class, not even an easy arrest of a member of the lower classes.

I'm not sure what you'd expect police to do about it.
posted by NotAYakk at 7:52 AM on May 13 [6 favorites]

This succinct description of NFTs nails it: "You get a membership to a fancy gym, and that membership is transferable, but there is no gym".
posted by cotterpin at 8:29 AM on May 13 [16 favorites]

I suspect a lot of police departments just don't know where to start with such cases. If they thought would eventually be able to tell the world that they had arrested the people responsible for stealing millions of dollars from investors, they'd do it and get themselves in the news. "[town name] Police Department Shuts Down International Scam, Recovers Millions"

By now, every country should have a big building full of people who can crack these things and show local departments how to handle stuff from their end. "If you show the IRS this and this, we also have them on tax evasion..."
posted by pracowity at 8:40 AM on May 13 [4 favorites]

That's fair, pracowity! I am probably being too optimistic, but I would hope there would be white hat techies who'd be interested in assisting with this. I mean, at the end of the day, when it comes to NFTs, a fool and his money are soon parted.
posted by Kitteh at 8:42 AM on May 13 [1 favorite]

I'm not sure what you'd expect police to do about it.

Sometimes having a police report on file is itself an important piece of evidence, even if there's no followup.
posted by fatbird at 8:54 AM on May 13 [1 favorite]

I would hope there would be white hat techies who'd be interested in assisting with this
If there were rewards going around, I bet a lot of people would help in exchange for a possible percentage of the money recovered. And there must be people who know these particular scammers IRL and would be happy to give them up in exchange for some spending money.
posted by pracowity at 9:12 AM on May 13

During the NFT heyday, you knew the money was all gone the moment the creators began opining about the importance and value of "the community we built."
posted by Dark Messiah at 9:46 AM on May 13 [3 favorites]

I used to have a job with an event-planning component, and we'd blow through $15,000 easily for a relatively small catered event lasting three hours for about 125 people...and this was ten years ago.

This is part of why, say, weddings cost so much now. It’s not even the nonsense stuff, it’s feeding 125 people now costs the earth, but mentally we haven’t adjusted to that as the new normal.
posted by corb at 10:35 AM on May 13

I used to call NFT's provenance without possession, but I'm sure there's more to it than that.
posted by BrotherCaine at 3:46 PM on May 13

Well, that's 2 less people to message me on Instagram about converting my art to NFTs, so that's good, I think.

These days it's mainly fake profiles telling my 59 year old self that age is nothing but a number and, I don't miss the NFT folks at all.
posted by Phlegmco(tm) at 7:38 PM on May 13