A 24-year-old French man who created “Mutant Ape Planet” NFTs is facing federal charges in Brooklyn. He is accused of defrauding customers of $2.9 million.
In a criminal complaint unsealed Thursday, prosecutors allege Aurelien Michel lured eager purchasers of Mutant Ape Planet NFTs with false promises of exclusive raffles, a community cryptowallet and land in Facebook’s Metaverse.
Some of those customers lived in New York’s Eastern District, which spans Brooklyn, Queens and Long Island.
NFTs, short for “non-fungible tokens,” are unique digital assets — which can include artworks or images — stored on a blockchain.
Or, as Jake Brukhman, who founded CoinFund, explained to NPR: "You're not buying the picture. You're buying the property rights to the picture."
After selling 9,999 ape NFTs in four days last February, Michel transferred the $2.9 million he’d amassed to his own cryptowallets, according to the federal complaint written by Kayla Blades, a special agent with the Department of Homeland Security.
He was cuffed at JFK Airport on Wednesday night and appeared before U.S. Magistrate Judge James Cho Thursday in Brooklyn Federal Court. Michel was deemed a flight risk, said John Marzulli, a spokesperson for the Eastern District, and was being detained at the Metropolitan Detention Center in Brooklyn while his attorneys prepared a request for bail. An attorney representing Michel didn’t return a request for comment right away.
In June, after the alleged swindle, prosecutors say Michel posted an apology in the Mutant Ape Planet Discord Channel.
“We never intended to rug but the community went way too toxic,” the message read, according to prosecutors. “I recognize that our behavior led to this . . . .”
In a statement, U.S. Attorney Breon Peace promised fraud would be prosecuted even in the rapidly evolving markets for crypto and NFTs.
Michel “used a traditional criminal scheme to defraud consumers eager to participate in a new digital asset market,” Peace said.