The U.S. Department of Justice (DoJ) has charged Aurelien Michel, developer of the non-fungible token (NFT) project Mutant Ape Planet, for defrauding customers out of over $2.9 million.
According to the criminal complaint on January 5, it was revealed that Michel told NFT investors that the digital collectibles would soar in value in a short time frame. Michel misrepresented to unsuspecting individuals that buying the NFTs would offer them “numerous rewards and benefits.”
In a classic rug pull, Michel absconded with the funds and abandoned the project, leaving thousands of investors with worthless digital collectibles. The DoJ report confirmed that none of the investors received any of the promised perks and the value of their holdings tumbled to nearly zero.
The DoJ’s filing revealed that the 24-year-old diverted the funds to his personal pockets and splurged on luxury purchases. Breon Peace, United States Attorney for the Eastern District of New York, noted that Michel used an old criminal scheme to defraud individuals in a new market.
In his defense, Michel admitted to the rug pull but blamed his actions on the difficult terrain in the NFT space. “We never intended to rug but the community went way too toxic,” Michel said.
“Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions,” Thomas Fattorusso, acting Special Agent-in-Charge, Internal Revenue Service – Criminal Investigation, said.
Michel, a French citizen, has been living in the United Arab Emirates (UAE) but was arrested at the John F. Kennedy International Airport in New York.
Another day, another rug pull
Rug pulls are a fairly common occurrence in the virtual currency space, with decentralized finance (DeFi) bearing the brunt of the dastardly act. However, the NFT ecosystem has had its own fair share of rug pulls, with the number of incidents rising with the popularity of digital collectibles.
In 2022, the industry was rocked by several rug pulls, including the Frosties NFT incident, which cost investors losses of nearly $1.3 million. Baller Ape Club raised $2 million in weeks as the project’s founders deleted their social media accounts and disappeared into thin air.
Other tragedies that rocked the space include Banksy’s fake NFT, Evolved Apes’ $2.7 million scam, and the alleged Azuki NFT scam. While Azuki is not yet considered a rug pull, the community reaction to discovering the founder’s streak in abandoning NFT projects makes it noteworthy.
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