Aurelien Michel, a French national residing in the United Arab Emirates (UAE), was arrested on Wednesday evening and charged with defrauding investors, in his Mutant Ape Planet NFTs, of $2.9 million.
A criminal complaint unsealed in a US federal court on Thursday revealed the 24-year-old was arrested a day prior by US government authorities at JFK International Airport.
Michel capitalized on the broader ape-themed NFTs early last year by offering 9,999 images of mutant apes. The NFTs were sold on the Ethereum blockchain and cost approximately $468 each when the collection launched.
However, it is alleged that Michel duped investors and fled with investors' funds. The US government complaint stated: “As alleged, Aurelien Michel perpetrated a ‘rug pull’ scheme – stealing nearly $3 million from investors for his own personal use. Purchasers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were deceived and received none of the promised benefits.”
The IRS Acting Special Agent-in-Charge, Thomas Fattorusso stated in the US Justice Department press release: “Once the NFTs were sold-out, Michel allegedly ceased communications and withdrew purchasers’ funds from the company’s cryptocurrency wallets, lining his pockets with nearly $3 Million of investors’ money.”
You can read the full complaint and affidavit against Michel here.
Watch the recent FMLS22 session on Digital Assets’ Marketing Under A Magnifying Glass.
Is the NFT World Imploding?
The arrest of Aurelien Michel comes at a time when a battered and bruised NFT world comes under heightened government scrutiny. Prices of NFTs (non-fungible tokens) plummeted in 2022 amid general crypto market chaos.
Whilst several high-profile NFT projects have seen their values slump, the NFT world has been plagued with hacking problems.
Millions of dollars worth of NFTs were stolen in 2022 and confidence in the once burgeoning digital market has plunged. The recently released Trump NFT cards saw their value drop by over 75% within the first two weeks.
However, against the backdrop of hacks and crypto chaos, the number of NFTs traded last year increased dramatically, even though the total trading volume remained relatively stable.
The analytics firm, DappRadar logged approximately 101 million NFT transactions during 2022, which is up from about 58.6 million in 2021. With crypto and NFT prices falling, more NFTs were exchanged at lower USD values.
