Creator of Mutant Ape ripoff NFTs pleads guilty to $3M fraud scheme

Tom Mitchelhill7 hours agoCreator of Mutant Ape ripoff NFTs pleads guilty to $3M fraud schemeThe French developer of the Mutant Ape Planet NFT collection faces up to five years in prison after pleading guilty to wire fraud charges.3767 Total views10 Total sharesListen to article 0:00NewsJoin us on social networksThe creator of the Mutant Ape Planet nonfungible token (NFT) collection — a knock-off of Yuga Labs’ Mutant Ape Yacht Club project — has pleaded guilty to conspiracy to commit wire fraud in a New York federal court.

In a Nov. 14 statement, the United States Attorney’s Office for the Eastern District of New York said French national Aurelien Michel pleaded guilty to executing a “rug pull” and admitted to defrauding investors out of $3 million in connection with the fraudulent Mutant Ape Planet NFTs.Nonfungible Token (NFT) Developer Pleads Guilty to an International Scheme to Defraud NFT Purchasers

Aurelien Michel Conspired to Steal From Purchasers of “Mutant Ape Planet” NFTs Through False Promises and Misrepresentations@HSINewYork @IRSCI_NY https://t.co/K3CzIb8dQD— US Attorney EDNY (@EDNYnews) November 14, 2023

According to Department of Justice (DOJ) prosecutors, Michel and his co-conspirators marketed the NFTs to investors by falsely promising them rewards and benefits designed to increase the demand for the collection.

Prosecutors said Michel and his associates “intentionally failed to deliver on these promises, diverting millions of dollars’ worth of proceeds for their personal benefit.”

“While Michel purported to sell dream NFTs backed with rewards and benefits, he defrauded investors, turning their dream into a nightmare of deception and losses,” said Thomas M. Fattorusso, special agent in charge of the Internal Revenue Service criminal investigation in New York.“There is no excusing this kind of greed, and today’s guilty plea brings Michel one step closer to realizing his own nightmare — behind bars.”

Michel was arrested in New York on Jan. 4, 2023, on charges related to the scheme. The DOJ said on Jan. 5 that Michel admitted to the NFT collection’s community via a social media chat that he perpetrated a rug pull and said, “We never intended to rug but the community went way too toxic.”

Upon sentencing, Michel faces a maximum sentence of five years in prison and has agreed to pay $1.4 million in restitution.

Related:Cryptoqueen’s OneCoin legal chief pleads guilty to fraud

The Mutant Ape Planet collection, which has since been removed from the NFT platform OpenSea, once consisted of 6,797 NFTs minted on the Ethereum blockchain.

In February 2022, it boasted more than 320 Ether (ETH) in sales volume, which dropped significantly by April 2022, two months later.Sales of the Mutant Ape Planet NFT collection between January 2022 and January 2023. Source: OpenSea

By January 2023, around the time of Michel’s arrest, the average price and total sales volume of the collection had cratered to near zero.

Magazine:I spent a week working in VR. It was mostly terrible, however…# Law# United States# Court# NFT# RegulationAdd reactionAdd reactionRead moreCan crypto Privacy Pools help balance privacy and regulation?How to manage crypto losses on tax returns in the US, UK and Canada‘I’m still not seeing it’ — Judges skeptical of Ryder Ripps’ BAYC appeal