The creator of the Mutant Ape Planet nonfungible token (NFT) collection, a replica of Yuga Labs’ Mutant Ape Yacht Club project, has pleaded guilty to conspiracy to commit wire fraud in a New York federal court. French national Aurelien Michel, the developer behind this fraudulent NFT venture, admitted to executing a “rug pull” and defrauding investors of $3 million in connection with the illegitimate Mutant Ape Planet NFTs.
According to the United States Attorney’s Office for the Eastern District of New York, Michel and his co-conspirators marketed the NFTs to investors by making false promises of rewards and benefits, with the intention of artificially boosting demand for the collection. However, they deliberately failed to fulfill these promises, diverting millions of dollars for personal gain.
Michel’s arrest in New York on January 4, 2023, was a result of charges related to this fraudulent scheme. On January 5, Michel openly admitted to perpetrating a rug pull via a social media chat with the NFT collection’s community, stating, “We never intended to rug but the community went way too toxic.”
Upon sentencing, Michel faces a maximum prison term of five years and has agreed to pay $1.4 million in restitution.
The Mutant Ape Planet collection, initially consisting of 6,797 NFTs on the Ethereum blockchain, has since been removed from the NFT platform OpenSea. In February 2022, it recorded over 320 Ether in sales volume, a figure that significantly declined by April 2022. As of January 2023, around the time of Michel’s arrest, the average price and total sales volume of the collection had plummeted to nearly zero.
This case highlights the prevalence of fraudulent activities in the NFT space and the significant impact such schemes can have on unsuspecting investors. The guilty plea underscores the legal consequences awaiting individuals involved in deceptive practices within the cryptocurrency and NFT ecosystems. As the NFT market continues to grow, regulatory scrutiny and legal actions against fraudulent actors become increasingly crucial to maintaining the integrity and trustworthiness of these digital asset spaces.
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