The developer of a Mutant Ape Yacht Club knock-off collection — Mutant Ape Planet — has been arrested in New York and charged with defrauding investors of $2.9 million in a “rug pull scheme.”
The arrest was made at John F. Kennedy International Airport in New York. alleging that French national “Aurelien Michel perpetrated a rug pull scheme” and stole “nearly $3 million from investors for his own personal use.” He also added:
“Purchasers of Mutant Ape Planet NFTs thought they were investing in a trendy new collectible, but they were deceived and received none of the promised benefits.”
Internal Revenue Service agent Thomas Fattorusso was quoted in a press release from the Department of Justice as saying that “Michel defrauded investors by making false representations of, amongst other things, giveaways, tokens with staking features, and merchandise collections.” But Michel withdrew the funds once the nonfungible tokens (NFTs) were sold out, the release says.
According to the statement, Michel admitted to the community via a social media chat that he had perpetrated a rug pull, saying “we never intended to rug but the community went way too toxic.”
The collection — a knock-off of the popular Mutant Ape Yacht Club NFT collection — consists of 6,797 NFTs stored on the Ethereum blockchain. The collection has been credited with 567 Ethers (ETH) total. sales However, it has seen its average sale volume and price plummet since January 2022 when it was launched.
Holders of the collection shared their stories via Twitter after James was arrested.
When I’m reality what was happening was the founders were actually not holding to their promised utility leading in to people losing trust and then one day the founders completely disappeared with no notes, nothing. The community was decimated by a lot of people leaving.
— PerfectElectro (@electro_perfect) January 5, 2023
Since then, the community has taken control of the project and is trying to breathe new life into it. The initiative was spearheaded in part by HTMadge (user with pseudonym HTMadge).
According to a Dec. 21 DappRadar report, rug pulls — a type of exit scam where the creators of a project suddenly abandon or withdraw liquidity from the platform — were the most common type of attack last year, accounting for 119 incidents and $200 million in stolen funds.
Related: Magic Eden to reimburse victims of fake NFTs that were sold as a result of exploit
Lana Rhoades is a well-known influencer who was also a former star of adult films. She was allegedly behind one of the largest rug pulls of 2022. She reportedly walked away with $1.5million from the minting NFT projects that have seen less than 1ETH in secondary market sales.