The developer of Mutant Ape Planet non-fungible tokens (NFTs) has been charged with defrauding buyers.
The U.S. Attorney’s Office of the Eastern District of New York said in a Thursday (Jan. 5) press release that Aurelien Michel was arrested Wednesday (Jan. 4) and charged with defrauding the buyers of about $3 million in cryptocurrency.
“As alleged, Aurelien Michel perpetrated 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. “Purchasers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were deceived and received none of the promised benefits.”
A “rug pull” is a scam in which operators pitch a project to investors and then, once they’ve collected enough money, run off with all the funds.
The criminal complaint against Michel alleges that he marketed NFTs and promised purchasers rewards and benefits that would boost the value of the NFTs.
Among the benefits Michel had promised to purchasers of the NFTs were giveaways, tokens with staking features and merchandise collections, Thomas Fattorusso, acting special agent-in-charge at the Internal Revenue Service-Criminal Investigation, New York, said in the release.
Once the NFTs were sold out, Michel pulled out of the project, provided none of the promised benefits and kept the purchasers’ cryptocurrency for himself, according to the press release.
“As alleged, the defendant used a traditional criminal scheme to defraud consumers eager to participate in a new digital asset market,” Breon Peace, U.S. Attorney for the Eastern District of New York, said in the release. “Protection from fraud and manipulation extends to all consumers and investors, including those participating in the fast-evolving market for NFTs and other crypto assets.”
Complaints about crypto-asset frauds and scams have been 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 these complaints involved frauds and scams, the CFPB said at the time.
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