- A Mutant Ape Planet NFT creator has been charged with defrauding investors to the tune of some $3 million
- The developer admitted to intentionally duping investors by creating a replica of Yuga Lab’s Mutant Ape NFT collection
- The developer had told investors that he was leaving the project due to its community’s toxicity
Mutant Ape Planet NFT creator Aurelien Michel has been arrested and charged for defrauding investors to the tune of some $3 million through a rug pull scam. Although the French national admitted to duping the investors, he blamed his actions on the project’s community which he claimed had turned toxic. Investigating authorities have refuted the claims saying that the NFT creator had no intentions of committing to the project.
The NFT Community Toxicity Led to the Rug Pull
According to Thomas Fattorusso, an officer with the United States Internal Revenue Service (IRS), Michel had promised investors giveaways, merchandise, and staking-enabled tokens among other features, but instead cut communications with investors once the project’s Ethereum-based NFTs were sold out.
The developer liquidated and pocketed all funds totalling close to $3 million before pointing fingers at investors. According to the United States Department of Justice, Michel admitted to initiating a rug pull scheme but claimed that it wasn’t intentional and was due to a toxic community.
Some of the investors who shared their experiences on Twitter reveal that the NFTs’ price tanked shortly after being sold out, with no sign of any “promised utility.”
Lack of activity and actual showing of any sign of promised utility. This led to a lot of the community being skeptical. This lead to a increase of fud flowing in the chats and it becoming extremely toxic. However the founder of @planet_mutant claims that we caused him to leave-
— PerfectElectro (@electro_perfect) January 5, 2023
Fraud Protection Includes NFT Investors
The situation surrounding the project caused the community to become skeptical leading to the spread of fear, uncertainty and doubt. Authorities hold that the French national preyed on consumers’ eagerness to enter the digital collectibles market, a typical ruse used by scammers..
Breon Peace, United States Attorney for the Eastern District of New York, said that “protection from fraud and manipulation” extends to those in the cryptocurrency and NFT markets and that he and his team would continue to seek out perpetrators of such scams.