Aurelien Michel, the developer behind the Mutant Ape Planet non-fungible token (NFT) collection, has pleaded guilty to defrauding buyers in a scheme that netted nearly $3 million. This situation unfolded subsequent to Michel’s apprehension on January 4 at John F. Kennedy International Airport in New York. At this juncture, he faced allegations of defrauding investors to the tune of $2.9 million, an act characterized as a “rug pull scheme.”
Upon his arrest, Homeland Security agent Ivan J. Arvelo alleged that Michel, a French national residing in the United Arab Emirates, perpetrated a rug pull scheme. He accused Michel of deceiving investors and using nearly $3 million for his personal use. He added that buyers of Mutant Ape Planet NFTs believed they were investing in a trendy new collectible but were ultimately deceived, receiving none of the promised benefits.
In a press release issued by the Department of Justice, Internal Revenue Service agent Thomas Fattorusso was cited, stating that Michel misled investors with deceptive claims. These included promises of giveaways, tokens with staking capabilities, and exclusive merchandise collections. Following the sell-out of the NFTs, Michel proceeded to withdraw the funds.
Michel confessed to the community on the community’s Discord channel regarding his actions. He explained that these were a response to what he perceived as increasing toxicity within the community. This was contrary to it being a premeditated scheme from the outset. He is currently facing a potential prison sentence of up to five years and has consented to relinquish $1.4 million.
The Mutant Ape Planet collection, a derivative of the popular Mutant Ape Yacht Club NFTs, comprises 6,797 NFTs on the Ethereum blockchain. Despite initial success with 567 Ether in sales, the collection’s value and sales volume plummeted after its launch in January 2022. In a turn of events, the project is now being revived by the community, led by a user known as HTMadge.
This incident is part of a broader pattern in the NFT market. According to a DappRadar report dated December 21, rug pulls were the most common form of attack in the previous year, with 119 incidents amounting to $200 million in stolen funds. Another notable case involved influencer Lana Rhoades, accused of a major rug pull in 2022, allegedly walking away with $1.5 million from an NFT project that subsequently saw negligible secondary market sales.
