- Aurelien Michel, a French national, has pleaded guilty to a $3 million fraud involving the sale of Mutant Ape Planet NFTs.
- Michel and associates deceitfully marketed these NFTs, promising rewards and benefits to investors that were never fulfilled.
- This fraudulent scheme left investors with considerable losses, highlighting the risks in the unregulated NFT market.
In a significant development in the digital art world, Aurelien Michel, a French national, has admitted to a major fraud involving the sale of Mutant Ape Planet NFTs. This collection, a derivative of the renowned Mutant Ape Yacht Club by Yuga Labs, became the center of a $3 million fraud scheme. Michel’s guilty plea to conspiracy to commit wire fraud was entered in a New York federal court, as announced by the U.S. Attorney’s Office for the Eastern District of New York on November 14.
Michel and his associates were accused of deceitfully marketing these NFTs, promising investors rewards and benefits to spur demand. However, these promises were never fulfilled. Instead, the proceeds, amounting to millions of dollars, were diverted for personal use. This act, known as a “rug pull” in cryptocurrency, left investors facing significant losses.
Nonfungible Token (NFT) Developer Pleads Guilty to an International Scheme to Defraud NFT Purchasers
— US Attorney EDNY (@EDNYnews) November 14, 2023
Special agent Thomas M. Fattorusso of the IRS Criminal Investigation in New York emphasized the gravity of Michel’s actions, noting the transformation of investors’ dreams into a “nightmare of deception and losses.” The case underscores the risks inherent in the largely unregulated NFT market, where the line between innovative investment and fraudulent schemes can often blur.
Michel’s arrest in January 2023 marked a turning point in the case. Following his arrest, he admitted to the community via social media that the project was indeed a rug pull, a confession that came amidst growing toxicity within the community.
Upon sentencing, Michel faces up to five years in prison. Moreover, he has agreed to pay $1.4 million in restitution. This case highlights the ongoing challenges in the NFT space, where the excitement and novelty of digital assets often collide with the harsh realities of unscrupulous practices.
The Mutant Ape Planet collection, once a prominent offering on the NFT platform OpenSea, showcased 6,797 NFTs minted on the Ethereum blockchain. Initially, the group enjoyed substantial sales, with over 320 Ether in volume by February 2022. However, its value had significantly declined by April of the same year. By Michel’s arrest, the average price and total sales volume had plummeted to near zero, reflecting the collapse of trust and value in the wake of the fraud.
Michel’s case is a cautionary tale in the rapidly evolving world of NFTs. It highlights the need for greater oversight and consumer protection in a market that continues to captivate and confound investors and enthusiasts alike.