Architect of NFT “Rug Pull” Scheme Convicted
For the first time in U.S. history, a perpetrator of an NFT “rug pull” has been found guilty of a federal crime and could face imprisonment. Aurelien Michel, the 25-year-old founder of the ill-fated Mutant Ape Planet NFT collection, pleaded guilty to wire fraud charges after defrauding holders of almost $3 million. He now faces up to five years in federal prison and has agreed to pay $1.4 million in forfeiture, according to the Department of Justice.
Michel was arrested at New York’s JFK Airport in January, making his NFT project the third ever accused by federal authorities of executing a rug pull. According to prosecutors, Michel explicitly told Mutant Ape Planet holders that he had rug pulled them, citing toxic community behavior as the reason for failing to deliver on promised perks.
Fraudulent Activities Exposed
With today’s guilty plea, Michel has admitted to conspiring with others to defraud consumers eager to participate in the digital asset market, said U.S. Attorney Breon Peace. Days after Michel’s arrest, evidence connected him to two other prominent NFT rug pulls: Fashion Ape NFT and Crazy Camels. However, he has not been charged in relation to either project.
Past Cases Still Pending Resolution
Prior to Michel’s arrest, federal prosecutors charged creators of Frosties NFT project and Baller Ape Club NFT collection with similar crimes. The cases against these projects have not yet been resolved. The founders of Frosties were arrested in March last year, while the creator of Baller Ape Club was arrested last June for defrauding investors of $1.1 million and $2.6 million respectively.
Hot Take: Rug Pull Conviction Signals Crackdown on NFT Fraud
The conviction of Aurelien Michel marks a significant milestone in cracking down on fraudulent activities within the NFT space. This case serves as a warning to those who seek to deceive investors through false promises and misrepresentations tied to NFT projects. It also underscores the increasing efforts by federal authorities to hold individuals accountable for perpetrating large-scale frauds within the digital asset market.
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