- A rug pull scheme allegedly involved Michel stealing almost $3 million from investors.
- Michel pledged to devise strategies for the NFTs to appreciate in value and that holders of NFTs would be rewarded.
On January 5, the Eastern District of New York Office of the Department of Justice opened a criminal case against Mutant Ape Planet developer Aurelien Michel for misleading investors. Federal agents detained Michel last night at JFK airport in New York City on suspicion of wire fraud.
The Department of Justice claimed that Michel deceived investors by falsely claiming that there were “giveaways, tokens with staking functionality, and merchandise collections.”
Eventually, in discussions on social media with customers, Michel acknowledged “rugging,” the practice of developers raising money for a project, then taking it and running, but claimed it was because of the negative NFT crowd.
According to a Department of Justice press statement, Michel was cited as saying, “We never planned to rug but the community went way too toxic.”
According to the lawsuit submitted on January 3, Michel and other unnamed alleged perpetrators kept promising prospective buyers prizes, raffles, exclusive exposure to other cryptocurrency assets, and assistance for a community wallet with funds to be used to market the NFTs in an effort to sell the Mutant Ape Planet NFTs.
Authorities assert that the NFT project’s developers made misleading statements about acquiring “metaverse land.”
However, none of the promises Michel made came true. After all the NFTs had been sold, Michel and the other unnamed defendants allegedly transferred the roughly $3 million in earnings to other wallets, including wallets under Michel’s control.
The filing reads, the defendant employed a conventional criminal plan to mislead customers excited to take part in a brand-new digital asset market, according to the U.S. Attorney for the Eastern District of New York Breon Peace.
All customers and investors, including those involved in the quickly growing market for NFTs and other crypto assets, are protected from fraud and manipulation.
This action marks the third attempt by federal prosecutors to bring charges against those responsible for NFT rug pull schemes.
The US DOJ has been quite proactive in implementing strategies that benefit the Web 3 industry. The DOJ was recently involved in a seizure of $3.36 billion in stolen bitcoin assets representing the second-largest recovery in history.
The crypto loot was taken in 2021 from the American residence of a cryptocurrency hacker who had earlier “illegally” purchased more than 50,000 bitcoins (BTC) from the now-defunct Silk Road illegal dark-web bazaar.