Founder of Popular Mutant Ape NFT Collection Arrested on Charges of Rug Pull
The DoJ alleged that the developer of Mutant Ape Planet NFTs made off with $3 million of customers’ funds after making false promises to buyers.
On Thursday, January 5, the US Department of Justice (DoJ) announced that it had arrested Aurelien Michel, the 24-year-old developer of the Ethereum NFT collection Mutant Ape Planet.
The US DoJ has dropped criminal charges of fraud and defrauding investors via a $2.9 million racketeering scheme. Citing charges of wire fraud, federal authorities arrested Aurelien Michel at JFK Airport in New York City.
According to the complaint filed by the DoJ, Michael and others marketed these Mutant Ape Planet NFTs to potential buyers. Moreover, they also promised them that the NFT purchases would have other benefits such as “rewards, raffles, exclusive access to other cryptocurrency assets and the support of a community wallet with funds to be used to market the NFTs”.
The federal authorities also noted that project developers made false promises to acquire the “metaverse land” for the NFT project. This is the third time federal prosecutors have cracked down on NFT projects trying to pull off a rye move. Blanket pulls basically constitute schemes where NFT project creators sell NFTs on false promises of community benefits, financial benefits and utility. Later they abandon these projects and do away with the investors’ funds.
It turns out that none of Michael’s promises have been taken up. After selling all the Mutant Ape Planet NFTs, Michael and other defendants allegedly transferred $3 million of their proceeds to other wallets. One of these wallets also comes under Michael’s control.
The details of the Mutant Ape case
The US Department of Justice (DoJ) and federal prosecutors worked with the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS).
Authorities said buyers of Mutant Ape Planet NFTs became suspicious of the transfers. Also, in a Discord Channel, Michael also admitted that he had the blanket. Posting under the pseudonym “james”, Michael said: “We never intended to brood, but the community became far too toxic,” the developer posting as “James” wrote: “I acknowledge that our behavior led to this…”
Commenting on this whole development, Thomas Fattorusso, Acting Special Agent in Charge of the Internal Revenue Service’s (IRS) Criminal Investigation Team, said:
“It is alleged that Michel defrauded investors by making false representations of, among other things, giveaways, tokens with wagering functions and merchandise collections. Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions.”
Last year, the DoJ dealt with two such NFT rug-pull incidents. They filed similar charges against the creator of the Baller Ape Club NFT collection alleging a $2.6 million carpet sweep. The first ever carpet case from the DoJ was against the creators of the Frostie NFT project.
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Bhushan is a FinTech enthusiast and has a keen flair for understanding the financial markets. His interest in economics and finance draws attention to the emerging markets of blockchain technology and cryptocurrency. He is continuously in a learning process and stays motivated by sharing his acquired knowledge. In his spare time, he reads thriller novels and sometimes explores his culinary skills.
