Feds allege NFT developer defrauded buyers
The developer of Mutant Ape Planet non-fungible tokens (NFTs) has been charged with defrauding buyers.
The United States Attorney’s Office for the Eastern District of New York said on a Thursday (January 5) press release that Aurelien Michel was arrested on Wednesday (January 4) and charged with defrauding the buyers of around $3 million in cryptocurrency.
“As alleged, Aurelien Michel conducted a ‘rug pull’ scheme – stealing nearly $3 million from investors for his own personal use,” Ivan J. Arvelo, special agent in charge of homeland security investigations in New York, said in the release. “Buyers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were duped and received none of the promised benefits.”
a “carpet cover” is a scam where operators present a project to investors and then, when they have raised enough money, run off with all the funds.
The criminal complaint against Michel alleges that he marketed NFTs and promised buyers rewards and benefits that would increase the value of the NFTs.
Among the benefits that Michel had promised buyers of the NFTs were gifts, tokens with staking features and merchandise collections, Thomas Fattorusso, acting special agent with the Internal Revenue Service-Criminal Investigation, New York, said in the release.
When the NFTs were sold out, Michel pulled out of the project, giving none of the promised benefits and keeping the buyers’ cryptocurrency for himself, according to the press release.
“As alleged, the defendants used a traditional criminal scheme to defraud consumers eager to participate in a new market for digital assets,” Breon peace, U.S. attorney for the Eastern District of New York, said in the release. “Protection against fraud and manipulation extends to all consumers and investors, including those participating in the rapidly evolving market for NFTs and other crypto-assets.”
Complaints about scams and crypto-asset scams have become increasingly common.
The Consumer Financial Protection Bureau (CFPB) reported in November that it had received more than 8,300 complaints related to crypto assets between October 2018 and September 2022 – most of them in the last two years.
About 40% of those complaints involved scams and fraud, the CFPB said at the time.
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