- The FBI has disclosed it will contact crypto fraud victims using NFTs
- This option is only available to victims of the CluCoin project
- CluCoin founder admitted to using investors’ funds to fuel his gambling addiction
The FBI has for the first disclosed that it’ll use NFTs to contact victims who lost funds in the CluCoin project. The project’s founder, Austin Taylor, admitted to using over $1 million of user funds to fuel his gambling addiction. According to a statement from the United States Attorney’s office, NFT notices will be delivered to people identified as actual victims, an indication that law enforcement agencies are willing to work with crypto fraud victims to either recover funds or bring culprits to book.
Shifting Sands
The statement revealed that CluCoin started as a cryptocurrency project before Taylor redirected to the NFT, metaverse, and gaming space. The shift from crypto to other projects happened after the project completed a fundraising event in 2021.
Taylor followed the shift with marketing campaigns such as an NFT and metaverse-focused conference in Miami in April 2022. After the conference, the founder started withdrawing project funds to his personal wallets, before sending them to gambling sites.
In early 2023, Taylor admitted to investors that he had a gambling addiction and apologized for withdrawing their funds. According to the US Attorney’s office, Taylor agreed to pay back investors’ funds and is set to be sentenced for wire fraud in October.
Court Papers Served as NFTs
This isn’t the first time collectibles have been used in the legal system. Last year, for example, a federal judge in the United States allowed a plaintiff to serve court papers to a defendant through NFTs.
MetaBirkins NFT creator was also ordered by the court to airdrop a court order to all of the collection’s holders. The court order indicated that the creator infringed on the rights of MetaBirkin handbag manufacturer, Hermes.
With the FBI openly using NFTs to contact fraud victims, it’s to be seen whether this will become the preferred communication method in cases involving virtual collectibles.
