French national Aurelien Michel has pleaded guilty to conspiring to commit wire fraud in connection with the ‘Mutant Ape Planet’ NFT collection.
Michel, who previously resided in the United Arab Emirates, entered the plea before a federal courthouse in Brooklyn, New York, where he admitted to executing a rug pull scheme, defrauding investors of US$3 million with the fraudulent NFT investment scheme.
Michel and his co-conspirators marketed the phony Mutant Ape Planet NFTs by falsely promising rewards and benefits to increase demand.
However, they failed to deliver these promises, diverting the proceeds for personal benefit.
The Mutant Ape Planet collection, a knock-off of Yuga Labs’ Mutant Ape Yacht Club project, was once listed on the NFT platform OpenSea and consisted of 6,797 NFTs minted on the Ethereum blockchain.
Genuine Mutant Ape NFTs for sale on the OpenSea NFT marketplace – Credit: opensea.com
Michel was first charged in January 2023 and faces a maximum sentence of five years in prison. He has also agreed to pay US$1.4 million in restitution.
“With today’s guilty plea, Michel has admitted that he conspired with others to defraud consumers eager to participate in a new digital asset market,” United States Attorney Breon Peace commented.
Ivan J. Arvelo, Special Agent in Charge of Homeland Security Investigations (HSI) New York, described Michel's actions as enticing investors with promises of capitalising on the NFT trend, only to abandon the project after amassing nearly US$3 million.
NFTs, which have perceived investment value due to their scarcity, have widely tanked in value since breaking into the mainstream during the 2021 cryptocurrency bull run.
A widely circulated research piece published by dappGambl in September showed that NFT trading volumes have decline by 97% since their peak back in August 2021.
“While Michel purported to sell dream NFTs backed with rewards and benefits, he defrauded investors, turning their dream into a nightmare of deception and losses,” said special agent Thomas M. Fattorusso. “There is no excusing this kind of greed, and today’s guilty plea brings Michel one step closer to realising his own nightmare — behind bars.”
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