Defendant, a French national who had been residing in the United Arab Emirates (UAE), pled guilty at the federal courthouse in Brooklyn, New York to conspiring to commit wire fraud in connection with defrauding purchasers of “Mutant Ape Planet” NFTs, a type of digital asset. Today’s proceeding took place before United States Magistrate Judge Vera M. Scanlon. When sentenced, Michel faces up to five years in prison. Michel has also agreed to pay $1.4 million in forfeiture. DOJ Press Release
“[Defendant] enticed investors with promises of capitalizing on the NFT trend, only to abandon the project after amassing nearly $3 million in what’s described as a ‘rug-pull scheme.’ The defendant, accused of misleading the Mutant Ape NFT community, claimed innocence and even labeled victims as ‘too toxic.’ However, these attempts to evade responsibility came to a conclusion with today’s plea,” stated Ivan J. Arvelo, Special Agent in Charge of HSI New York. “In the face of evolving investment landscapes, HSI remains vigilant, utilizing cutting-edge tools to safeguard individuals from unscrupulous actors and their attempts to exploit well-meaning investors.”
Accroding to the DOJ, Defendant marked NFTs under the allegedly false promise of numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs. After selling out of the NFTs, the purchasers were “rug pulled” – a cryptocurrency scam in which a developer attracts investors, but pulls out before the project is complete, leaving buyers with a worthless asset – as none of the promised benefits were provided. Instead, millions worth of the NFT purchasers’ cryptocurrency was diverted for Michel’s personal benefit.