Earlier this month, tragic news surfaced regarding Berman Nowlin, a 21-year-old from Alabama who was convicted of wire fraud and money laundering connected to an NFT rug pull involving the Undead Apes Society. Nowlin’s sentencing was scheduled for January 2024, where he faced up to five years in prison, but he died by suicide shortly after a Florida district court found him guilty. The Undead Apes Society, which was inspired by the popular Bored Ape project, featured three NFT collections minted over two months. Nowlin was responsible for coding the project’s smart contracts, while Devin Rhoden, a 23-year-old airman in the US Air Force, managed the art aspect of the NFTs.
The Rise and Fall of Undead Apes
The Undead Apes NFTs first launched in March 2022, with an initial collection of 2,500 minted on the Solana blockchain for 0.05 SOL each. The project’s appeal included unique traits designed to captivate the Metaverse community. A subsequent collection called Undead Lady Apes was minted later that month, priced at 0.75 SOL each, allegedly offering DeFi functionalities with enticing staking rewards. By April 2022, initial NFT collections surged in value, with floor prices reaching 3.6 SOL and 6 SOL, marking significant returns on initial investments.
Key takeaways
- Berman Nowlin, 21, was convicted of wire fraud and money laundering over the Undead Apes Society NFT rug pull, and died by suicide shortly after a Florida district court found him guilty.
- Nowlin wrote the project's smart contracts; Devin Rhoden, a 23-year-old US Air Force airman, handled the artwork.
- The first collection of 2,500 NFTs launched on Solana in March 2022 at 0.05 SOL each, followed by Undead Lady Apes at 0.75 SOL with promised staking rewards.
- By April 2022 floor prices had reached 3.6 SOL and 6 SOL before an announced Undead Tombstones mint collapsed when Stoned Ape Crew denied any partnership.
- Prices fell 85% within hours; the scheme netted about $161,548, split between the two, and evidence showed it had been planned from the start.
The Scam Unfolds
In late April 2022, another minting event was announced for Undead Tombstones, purportedly to provide additional benefits for existing holders. However, shortly after this announcement, the Stoned Ape Crew distanced themselves from any partnership, leading to a collapse of the minting effort and the eventual carpet pull. Within hours, the price of the NFTs plummeted by 85%, and it was revealed that the rug pull had netted around $161,548, which was quickly divided between Nowlin and Rhoden. Evidence presented indicated that the duo had planned the scam from the beginning.
Consequences and Reflections
The repercussions of the Undead Apes incident highlight the dark side of the crypto world, where promises can lead to significant financial loss. Rhoden received a five-year probation sentence after pleading guilty and provided testimony that implicated Nowlin, who had been diagnosed with autism and struggled with emotional maturity. This case serves as a poignant reminder that beneath the abstract concept of digital assets lies a disturbing reality that affects real lives. While many cases of fraud might elicit a mix of curiosity and schadenfreude, this particular incident reminds us that the consequences extend far beyond financial loss, affecting individuals and their families in profound ways.
Frequently asked questions
What is a rug pull?
It is when the people behind a crypto project take investors' money and abandon it, collapsing the value of what buyers hold. Here the collapse followed a promised follow-on mint that never materialised.
What happened to the second defendant?
Devin Rhoden pleaded guilty, received five years of probation, and gave testimony implicating Nowlin, who had been diagnosed with autism and struggled with emotional maturity.
Why is this case treated differently from other frauds?
The article makes that point directly: the sums involved were small by crypto standards, but the outcome was a death. It argues the human consequences of these schemes extend well past the financial loss.
