Michel, a French national based in the UAE, faced arrest at JFK International Airport earlier this year, unveiling a $3 million scam exploiting the fervor around NFTs. The fraudulent activity centred on the sale of “Mutant Ape Planet” NFTs, linked to the popular Mutant Ape Yacht Club series, each fetching close to $500.
The strategy employed by Michel involved enticing investors with promises of giveaways, tokens, merchandise, and staking features. After selling out the NFTs, communication abruptly ceased, and Michel withdrew funds, executing a classic “rug-pull scheme,” leaving investors with substantial losses.
Thomas Fattorusso, Acting Special Agent-in-Charge of the IRS – Criminal Investigation in New York, strongly condemned Michel’s actions, stating, “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.”
Acknowledging guilt in a Discord chat under the alias ‘James’, Michel, also the Mutant Ape founder, revealed the darker side of NFT investments. He admitted, “We never intended to rug, but the community went way too toxic,” pointing fingers at unnamed co-conspirators.
Breon Peace, the United States Attorney for the Eastern District of New York, stressed the significance of holding fraudsters accountable and safeguarding the public from large-scale frauds in the digital asset space. He stated,
“Our Office is acutely aware that criminal actors are taking advantage of the constant pace of innovation in the digital asset space.”
Michel, no longer able to shift blame to the NFT community, now faces up to five years in prison. Additionally, he has agreed to forfeit $1 as part of the legal consequences.