Forex in this article
• NFT founder allegedly defrauded investors of $2.9 million
• Alleged fraudster blames ‘toxic society’
• US authorities are significantly involved in law enforcement
Another fraud scandal weighs on the crypto world
The crypto world is not resting: Another arrest in connection with embezzled investor funds is causing a stir in the crypto community. The arrest of 24-year-old Frenchman Auren Michel, founder of Mutant Ape Planet NFTs, comes at a time when confidence in cryptoassets is already at an all-time low following the FTX scandal. The French citizen living in the United Arab Emirates is accused of defrauding investors out of $2.9 million in funds through a so-called “rug pull”.
The Mutant Ape Planet NFTs are computer-generated digital images of diseased monkeys in costumes built on the Ethereum blockchain. The project started in January 2022 and was very popular, with all 9,999 images sold out within an hour of being put up for sale.
Fraudsters blame society
In a so-called “rug-pull”, a form of fraud particularly prevalent in the NFT sector, NFT developers lure investors with attractive promises and then abandon the project without prior notice, pocketing the money they have accumulated. The investors are left behind and now hold a worthless investment. In the case of Mutant Ape Planet NFTs, a series of promises were made to investors which would result in an increase in the value of the investment. In addition, a separate cryptocurrency should be created, which will then be distributed for free to the owners of the NFTs. Instead of keeping those promises, Michel cut off communications shortly after the monkey images sold out and, according to the indictment, transferred the investor funds of nearly three million US dollars to his own digital wallet. According to the US Department of Justice indictment, Michel has already admitted to cheating on an internal Discord server, but blames the community. He claimed he never intended to cheat, but society had become too toxic.
American authorities are increasing the pressure on criminals
The highly opaque world of digital NFTs and crypto-investments, which are partially based solely on trust due to lack of regulation, naturally attracts fraudsters. The US Department of Justice has already responded to the increased threat and set up a team dedicated solely to fighting cryptocurrency-related crimes. In the past year, the US authorities have already succeeded in making a number of arrests in connection with crypto and NFT crime. In this case, too, investigations by the US Department of Justice led to Michel’s arrest. Prosecution in the crypto sector is often difficult, as a reliable connection between fraudsters and the stolen money can rarely be established. As the news site heise.de reports, the American investigators take advantage of the fact that Michel had given up his private phone number when registering his digital wallet, to which he transferred part of the stolen money, which he also used when entering the United States. A direct link could thus be established between him and the stolen money.
Carl Kusche / Editor finanzen.net
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