In a surprising twist of events, the creative force behind the notorious NFT “rug pull” heist, Aurelien Michel, is now grappling with federal charges that could lead to a substantial prison term, marking an unprecedented turn in American legal history.
Michel, a French national and the architect behind the Mutant Ape Planet nonfungible token (NFT) collection has pleaded guilty to wire fraud charges in a New York court, according to reports citing the statement from the US Attorney’s Office for the Eastern District of New York.
The Mutant Ape Planet collection, conceived by Michel, emerged as an illicit imitation of Yuga Labs’ Mutant Ape Yacht Club initiative. Michel orchestrated a scheme that defrauded investors of an astonishing $3 million in connection with the deceptive collection.
NFT Creator’s Deceptive Tactics
Within the legal framework outlined by the New York Department of Justice, Michel and his associates face charges of marketing NFTs adorned with false claims of unparalleled advantages and profits, meticulously crafted to enhance the allure of their holdings.
Prosecutors assert that Michel and his associates deliberately failed to fulfill their commitments, redirecting proceeds totaling millions of dollars for personal gain.
Thomas M. Fattorusso, the special agent in charge of IRS criminal investigation in New York, stated that despite Michel’s promises of offering NFTs filled with dreamlike rewards and benefits, he deceived investors, turning their aspirations into a painful reality of deceit and financial losses.
The NFT platform OpenSea has removed the Mutant Ape Planet, consisting of 6,797 NFTs on the Ethereum Mainnet. While sales of the fraudulent collection peaked in February 2022 with over 320 ether, its popularity waned until Michel’s arrest in January this year, rendering it nearly unknown.
In contrast, one of the most successful NFT ventures in 2021 was the Bored Ape Yacht Club (BAYC). Capitalizing on its popularity, the Mutant Ape Yacht Club, a spinoff, reaped the benefits of this affiliation. In that year, BAYC reportedly sold a staggering 276,700 Ethereum (ETH).
Michel conveyed to Mutant Ape buyers that their initial intent was not to orchestrate a “rug pull,” but the community dynamics turned excessively “toxic.”
This admission followed the failure to fulfill promises regarding tokens, including gifts, merchandise collections, and staking features, all previously assured as benefits within the realm of NFT collecting.
The NFT market, valued at $16 billion in 2021, is projected to reach $212 billion by 2030, with a compound annual growth rate (CAGR) of 34% during the period from 2023 to 2030.