Aurelien Michel, creator of the Mutant Ape Planet NFT collection—a copycat of the popular Mutant Ape Yacht Club (MAYC)—has been ordered to forfeit $1.4 million and pay a $15,000 fine after pleading guilty to defrauding investors. Although federal prosecutors sought a 37-month prison sentence, Michel avoided additional jail time beyond the one month he had already served.
Details of the Court’s Decision
On November 1, U.S. District Judge Margo Brodie issued Michel’s sentence, which included a financial penalty but no further prison time. Judge Brodie noted that while Michel and his co-conspirators raised $2.9 million from the NFT project, each investor did receive an NFT asset, even if its value was unclear. The judge remarked, “What that value is, is unclear,” as the NFTs maintained some tangible digital artwork, albeit diminished in worth since their release.
Michel’s defense team argued that the financial losses were inflated, asserting that NFT buyers still held “digital artwork” despite the unmet project promises. This argument likely influenced the court’s decision to forgo further prison time for Michel.
Admission of a “Rug Pull” Scheme
Michel was arrested in January 2023 on allegations that he executed a “rug pull” scheme. In a social media post, Michel admitted to abandoning the project, claiming, “We never intended to rug, but the community went way too toxic.” A “rug pull” involves developers collecting funds for a project only to abandon it without delivering on promised benefits, effectively defrauding investors.
The Mutant Ape Planet collection initially launched with 6,797 NFTs on the Ethereum blockchain, but its market performance dwindled, with the average price per NFT dropping sharply over time.
Failed Promises and Investor Losses
Prosecutors argued that Michel and his team deliberately misled investors by promoting exclusive rewards and benefits tied to the NFTs. However, these promises were never fulfilled, turning what was supposed to be a rewarding investment into what prosecutors described as a “nightmare of deception and losses.”
