Founder of Popular Mutant Ape NFT Collection Arrested on Charges of Rug Pull

UTC by Bhushan Akolkar · 3 min read
Founder of Popular Mutant Ape NFT Collection Arrested on Charges of Rug Pull
Photo: Depositphotos

The DoJ alleged the developer of Mutant Ape Planet NFTs ran away with $3 million of customers’ funds after making fake promises to the purchasers.

On Thursday, January 5, the US Department of Justice (DoJ) announced that they had arrested Aurelien Michel, the 24-year-old developer of the Ethereum NFT collection Mutant Ape Planet.

The US DoJ has levied criminal charges of fraud and defrauding investors via a $2.9 million rug pull. Citing wire fraud charges, the federal authorities arrested Aurelien Michel at JFK airport in New York City.

As per the complaint filed by the DoJ, Michael, and others marketed these Mutant Ape Planet NFTs to prospective buyers. Besides, they also promised them that the NFTs purchases would have other benefits like “rewards, raffles, exclusive access to other cryptocurrency assets, and the support of a community wallet with funds to be used to market the NFTs”.

The federal authorities also noted that project developers made fake promises about acquiring the “metaverse land” for the NFT project. This is the third time that federal prosecutors have been pushing against NFT projects trying to conduct a rug-pull. Rug pulls basically constitute schemes wherein NFT project creators sell NFTs on false promises of community benefits, financial perks, and utility. Later, they abandon these projects and make away with investors’ funds.

It turns out that none of Michael’s promises have been addressed. After selling all the Mutant Ape Planet NFTs, Michael and other defendants have allegedly transferred $3 million of their earnings to other wallets. One of these wallets also comes under Michael’s control.

The Details of the Mutant Ape Case Investigation

The US Department of Justice (DoJ) and federal prosecutors cooperated with the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS).

Authorities said that buyers of Mutant Ape Planet NFTs grew suspicious of the transfers. Besides, in a Discord Channel, Michael also admitted to the rug pull. While posting under the pseudonym “james”, Michael said: “We never intended to rug but the community went way too toxic,” the developer posting as “James” wrote: “I recognize that our behavior led to this…”

Commenting on this entire development, Thomas Fattorusso, Acting Special Agent-in-Charge with the Internal Revenue Service (IRS)’s Criminal Investigation team said:

“It’s alleged that Michel defrauded investors by making false representations of, amongst other things, giveaways, tokens with staking features, and merchandise collections. Michel can no longer blame the NFT community for his criminal behavior. His arrest means he will now face the consequences of his own actions”.

Last year, the DoJ caught hold of two such NFT rug-pull incidents. They filed similar charges against the creator of the Baller Ape Club NFT collection alleging a rug pull of $2.6 million. The first-ever rug pull case by DoJ was against the creators of the Frostie NFT project.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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