•The U.S. Justice Department announced Thursday it had arrested and filed criminal charges against the founder of an NFT project it alleges “rug pulled” holders and defrauded them of $2.9 million in cryptocurrency.
• Aurelien Michel, 24, the founder of Ethereum NFT collection Mutant Ape Planet, was arrested last night at JFK airport in New York City by federal authorities on wire fraud charges.
• The move constitutes the third time federal prosecutors have pursued charges against orchestrators of so-called NFT rug pulls—schemes where an NFT project’s creators sell NFTs on false promises of community benefits, utility, and financial perks, only to abandon the project and make away with investors’ funds.
• In this case, the DOJ alleges that Michel promised Mutant Ape Planet NFT holders giveaways, tokens with staking features, and merchandise collections but followed through on none of those commitments and instead pocketed almost $3 million.
Yet Another Rug Puller Arrested
Aurelien Michel, the founder of Mutant Ape Planet, an NFT platform, was arrested in late March 2021 by the U.S. Justice Department on charges of fraud and money laundering.The arrest and criminal charges brought by the U.S. Justice Department against the founder should serve as a warning to all cryptocurrency investors that scams are still a reality in the space.
According to the authorities, this particular founder allegedly bilked their victims out of nearly $3 million dollars worth of cryptocurrency in what is known as a “rug pull”; an exit scam where a founder will suddenly withdraw funds raised from an ICO or crowd sale and disappear leaving investors with nothing.
These risky schemes have become increasingly more common as crypto prices skyrocketed and more people pour money into these projects hoping to cash in on the nascent technology’s potential profits. Investors should do their due diligence when doing business with new digital asset operators, taking extra precautions when it comes to investments involving large amounts of money.
Who is Aurelien Michel?
Aurelien Michel is a French-born entrepreneur who founded Mutant Ape Planet, a platform that offers non-fungible tokens (NFTs). According to reports, over $1 million was raised from investors through the sale of these tokens. The U.S. Justice Department alleges that Michel defrauded his investors and laundered their funds via a series of shell companies located in the United States and abroad.
It was a shocking turn of events for 24-year-old Aurelien Michel, founder of the popular Ethereum NFT collection Mutant Ape Planet. After only hours of opening its store at JFK airport in New York City, federal authorities swooped in and arrested Michel on charges of wire fraud.
What Happened To Investors’ Funds?
According to prosecutors, most of the funds raised through Mutant Ape Planet were funneled through offshore accounts owned by shell companies controlled by Michel and used to purchase luxury items such as jewelry and cars for his personal use. In addition, some of these funds were allegedly transferred back to accounts owned by other individuals associated with Mutant Ape Planet in order to pay them for their services rendered while promoting or developing the project on behalf of Michel’s company.
Investing in Crypto – Proceed With Caution!
The arrest and subsequent charges brought against Aurelien Michel serve as yet another reminder that investing in cryptocurrencies and NFTs carries with it certain risks which must always be taken into consideration before putting any money towards such investments or ventures regardless of how promising they may appear on paper or how convincing the person selling them appears to be. During conversations with potential buyers/investors about them prior to investing any money into them whatsoever, there should be a lot of due diligence since there is no guarantee that anyone will get back any return on said investments at all. Due to the given nature of the inherent volatility present within crypto markets today you should always make sure to do your due diligence. NFTs have been witnessed as extremely volatile as the value of the tech and artwork is completely subjective and speculative, one needs only ask Justin Bieber to understand this point.