French National Avoids Prison In $2.9 Million In “Mutant Ape Planet” NFT Fraud Case

A French national who admitted to defrauding buyers of his “Mutant Ape Planet” NFTs will avoid additional prison time after a New York judge ruled it was unclear how much his scheme cost investors. 

Aurelien Michel, 26, pleaded guilty in November to wire fraud conspiracy, acknowledging he had falsely promised thousands of NFT buyers exclusive benefits to boost the value of the neon-coloured cartoon monkey assets. 

However, Michel abandoned the project after raising $2.9 million, according to federal prosecutors in Brooklyn, leaving investors without the promised rewards.

Michel Ordered Imposed with a $15,000 Fine

US District Judge Margo Brodie sentenced Michel to the one month he had already served following his January 2023 arrest. Judge Brodie also ordered Michel to forfeit $1.4 million and imposed a $15,000 fine. 

Federal prosecutors initially sought a 37-month prison term, arguing Michel’s fraudulent actions deceived buyers and caused significant financial harm. However, Michel’s defence team contended that the losses were overstated, pointing out that NFT holders did receive digital assets, although their exact value remained uncertain.

“The loss amount is unclear,” Judge Brodie said during the sentencing. “There’s no question you and your co-conspirators ultimately gained or at least received $2.9 million from the project,” she told Michel. “But there is also no dispute that everyone who purchased an NFT obtained or received something of value. What that value is, is unclear.”

The History of the Case

Michel was initially detained in Brooklyn following his arrest in January when federal authorities alleged he orchestrated a “rug pull” scheme that defrauded investors of nearly $3 million. 

In a press release, Homeland Security agent Ivan Arvelo stated Michel “perpetrated a rug pull scheme” and took advantage of the NFT market’s frenzy. The authorities claimed Michel admitted in a social media chat that he conducted the scheme, reportedly saying, “We never intended to rug, but the community went way too toxic.”

The Mutant Ape Planet collection consisted of 6,797 NFTs launched on the Ethereum blockchain, amassing 567 Ether in sales. However, prices for these digital assets rapidly declined following the collection’s release in January 2022 as Michel and his associates failed to deliver on their promises of exclusive benefits and rewards.

During his November 15 court appearance, Michel pleaded guilty, admitting that he intentionally misled buyers. Prosecutors stated that Michel promoted the NFTs with promises of high rewards and exclusive benefits but instead delivered “a nightmare of deception and losses.”

The case highlights the risks investors face in the burgeoning NFT market, where creators have occasionally exploited high demand with dubious promises.