DOJ files charges against alleged ‘Mutant Ape Planet’ NFT Rug Pull

The US Department of Justice announced on Thursday that it had arrested and filed criminal charges against the founder of an NFT project that it claims “rug pulled” holders and defrauded them of $2.9 million in cryptocurrency.

Aurelien Michel, 24, the founder of the Ethereum NFT collection Mutant Ape Planet, was arrested last night at JFK airport in New YorkvCitvy by federal authorities on charges of wire fraud. Michel, a French citizen, resides in the United Arab Emirates (UAE).

The move marks the third time federal prosecutors have pursued charges against orchestrators of so-called NFT blanket moves — schemes in which creators of an NFT project sell NFTs on false promises of societal benefits, utility and financial benefits, only to abandon the project and walk away. with the investors’ funds.

In this case, the DOJ alleges that Michel promised Mutant Ape Planet NFT holders giveaways, tokens with staking features, and merchandise collections, but followed through on none of those promises and instead deposited nearly $3 million.

Federal prosecutors cooperated in this action with both the Department of Homeland Security (DHS) and the Internal Revenue Service (IRS).

Complicating matters for Michel is the fact that prosecutors claim they have evidence that in a social media chat with current and potential Mutant Ape Planet NFT buyers, he admitted that he had indeed choreographed a rug pull, but only—allegedly – in response to the behavior of the Mutant Ape Planet community.

“We never intended to incubate, but the community became far too toxic,” Michel reportedly told the proprietors.

“Michel can no longer blame the NFT community for his criminal behavior,” Thomas Fattorusso, IRS Acting Special Agent in Charge, said in a statement. – His arrest means that he will now face the consequences of his own actions.

In June, DOJ became filed similar charges against the creator of the Baller Ape Club NFT collection for rug pullers valued at $2.6 million. The department’s first ever blanket move, against the creators of Frostie NFT Projectalleged that the Frostie creators defrauded holders of $1.1 million.

Rye moves are all too frequent in the vast, often anonymous, largely unregulated world of NFT trading, which last year generated a staggering $25 billion in sales.

Despite the common nature of such incidents, today’s action marks only the third occasion on which federal prosecutors have pursued charges against them.