Federal charges are coming down on a twenty-four year old NFT project developer who rug pulled his NFT collection, running off with nearly $3M in funds. It’s the latest federal pursuit of crypto rugpullers, an endeavor that is relatively new for federal bodies when it comes to NFTs. It’s also a stark reminder for those who create projects with ill intentions that there is no guarantee of protection just because NFTs are unregulated.
Let’s dive into the story surrounding this latest rug – and the implications from the impending federal charges.
A new information release from the Department of Justice details what is described as a $2.9M “international fraud scheme” by twenty-four year old French national Aurelien Michel, who had been living in the United Arab Emirates.
The filling alledges that Michel, who was arrested in New York’s JFK Airport, rugpulled his ‘Mutant Ape Planet’ NFT collection.
A statement in the release outlines that Michel “perpetrated a ‘rug pull’ scheme – stealing nearly $3 million from investors for his own personal use. 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,” according to Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations (HSI).
The report goes on to detail how Michel promised the likes of merchandise, metaverse land, and other potential perks for Mutant Ape Planet holders that were left wholly unaddressed before Michel left the community high and dry. The nail in the coffin citation comes from a quote from Michel on Discord, where he admitted to rugging the community after they became “way too toxic.”
A thread from crypto’s resident sleuth ZachXBT details that Michel was the host of other 7-figure and up rugpulls, including Crazy Camel Club and others.
The Department of Justice is laying down the hammer once more, a sign of a potential ramp up in strategy from the feds when it comes to cracking down on crypto hackers.
In recent weeks, we saw similar jurisdictions pursue Solana-based Mango Markets exploiter, Avraham Eisenberg, who notoriously described his exploits as a “highly profitable trading strategy.”
If the post-FTX maneuvers from federal authorities are any indication, hackers and exploiters could be on thin ice with U.S. authorities. Following Eisenberg’s apprehension, this week we saw the feds also set their sights on ex-Celsius CEO Alex Mashinsky.
We’ll see if the bear market conditions, consisting of a crypto market with more eyeballs now than ever in recent years, leads to a swifter hand of the law when it comes to high crimes.
