After entering a guilty plea to wire fraud, Austin Michael Taylor, the founder of Miami-based CluCoin, was given a two-year, three-month prison sentence.
The 41-year-old cryptocurrency entrepreneur acknowledged that he had misused investor money by using it to fuel a serious gambling addiction. Taylor faces a $1.14 million asset forfeiture and restitution order in addition to his jail sentence.
CluCoin’s Rise and Fall
Taylor pleaded guilty to one count of wire fraud in August 2024, acknowledging that between 2022 and 2023, he misappropriated money intended for CluCoin-related projects.
Instead of using the funds to grow the ecosystem, he redirected them to online gambling platforms in an attempt to recover losses, ultimately leading to financial ruin.
Taylor initially launched CluCoin ($CLU) in 2021 on the BNB Chain, promoting it as a community-driven token with a charitable focus.
Using strategies that were popular during the 2017 initial coin offering (ICO) boom, he exploited his sizable social media following to create buzz and draw in investors.
To further build credibility, he released a white paper detailing the project’s vision and long-term goals. He also expanded CluCoin’s ecosystem to include various ventures, such as Goobers NFT collection, Gridlock, a play-to-earn Web3 game, Xenia, a metaverse platform and “NFTCon: Into the Metaverse, a promotional event.”
However, despite these expansions, Taylor secretly used investor money for personal gambling, rather than funding project developments.
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Confession and Investigation
By early 2023, Taylor admitted his wrongdoing to investors, publicly revealing his gambling addiction.
“Over the last year I got incredibly addicted to gambling. Every dollar I could find I would put into Stake in hopes of winning big. Even when the big wins did happen it wasn’t enough. Eventually, I lost everything,” he confessed.
Following his admission, the FBI launched an investigation, even notifying fraud victims via NFTs to collect information on the case. Taylor, who was known online as DNPthree, faced up to 20 years in prison, the maximum penalty for wire fraud.
Sentencing and Defense Plea
During sentencing, Taylor requested leniency based on his 15 years of military-related service. His defence argued that his veteran status and mental health struggles should be considered for a lighter sentence.
A probation officer also noted that his military service could be a relevant factor in determining a reduced punishment.
Despite his plea, the court handed him a 27-month sentence, though it was significantly lower than the potential 20-year maximum.
Taylor’s case serves as a cautionary tale about the risks of unregulated crypto projects and the dangers of financial mismanagement. While blockchain technology and cryptocurrency continue to grow, investor trust remains fragile.