Authorities convicted Aurelien Michel for the Mutant Ape Planet NFT rug pull fraud, making it the first federal conviction of its kind.
In a landmark ruling, Aurelien Michel, the mastermind behind the notorious Mutant Ape Planet NFT project, has been sentenced to up to five years in federal prison. This conviction marks a significant milestone in the U.S. legal system, as Michel becomes the first individual convicted for an NFT “rug pull” scheme, a form of digital asset fraud.
Michel, aged 25, admitted guilt to wire fraud charges in a Brooklyn federal court. The charges stemmed from his role in defrauding investors in the Mutant Ape NFT project, with losses totaling nearly $3 million. Additionally, Michel agreed to a forfeiture of $1.4 million, as stated by the Department of Justice.
Michel’s Mutant Ape Planet project is among a growing list of NFT initiatives accused of executing “rug pulls.” This type of scam involves creators selling NFTs based on false promises such as exclusive community benefits, utility, or financial gains. The creators then abandon the project, absconding with the investors’ funds.
Federal authorities apprehended Michel at New York’s JFK Airport in January, spotlighting his project as the third NFT scheme to face federal scrutiny for rug pull practices. A French citizen residing in the United Arab Emirates (UAE) prior to his arrest, Michel shocked the NFT community by admitting to the rug pull.
Michel confessed to not delivering on promised giveaways, merchandise, and staking features linked to the Mutant Ape NFTs. His admission and subsequent conviction underscore a rising concern about fraudulent activities in the digital asset space. U.S. Attorney Breon Peace emphasized the government’s commitment to prosecuting fraud in rapidly evolving digital markets.
This case has broader implications for the cryptocurrency and NFT markets, highlighting the need for greater oversight and regulation. Investors, particularly those new to digital assets, are increasingly at risk from such fraudulent schemes.
Further investigations linked Michel to two other NFT scams: Fashion Ape NFT and Crazy Camels. Both projects, similar to Mutant Ape Planet, promised benefits to investors before abruptly shutting down. These projects collectively defrauded investors of over $2.7 million. However, Michel has yet to face charges for these additional scams.
Michel’s conviction sets a precedent in the legal approach to NFT fraud. Prior to this case, federal prosecutors charged creators of the Frosties and Baller Ape Club NFT projects with similar offenses, although these cases remain unresolved.
Federal authorities apprehended the Frosties creators in March of the previous year and the founder of Baller Ape Club in June. These projects are accused of defrauding investors of $1.1 million and $2.6 million, respectively.