Defendant, a French national who had been residing in the United Arab Emirates (UAE), pled guilty at the federal courthouse in Brooklyn, New York to conspiring to commit wire fraud in connection with defrauding purchasers of “Mutant Ape Planet” NFTs, a type of digital asset.  Today’s proceeding took place before United States Magistrate Judge Vera M. Scanlon.  When sentenced, Michel faces up to five years in prison.  Michel has also agreed to pay $1.4 million in forfeiture. DOJ Press Release

“[Defendant] enticed investors with promises of capitalizing on the NFT trend, only to abandon the project after amassing nearly $3 million in what’s described as a ‘rug-pull scheme.’ The defendant, accused of misleading the Mutant Ape NFT community, claimed innocence and even labeled victims as ‘too toxic.’ However, these attempts to evade responsibility came to a conclusion with today’s plea,” stated Ivan J. Arvelo, Special Agent in Charge of HSI New York. “In the face of evolving investment landscapes, HSI remains vigilant, utilizing cutting-edge tools to safeguard individuals from unscrupulous actors and their attempts to exploit well-meaning investors.”

Accroding to the DOJ, Defendant marked NFTs under the allegedly false promise of numerous rewards and benefits designed to increase demand for, and the value of, their newly acquired NFTs.  After selling out of the NFTs, the purchasers were “rug pulled” – a cryptocurrency scam in which a developer attracts investors, but pulls out before the project is complete, leaving buyers with a worthless asset – as none of the promised benefits were provided.  Instead, millions worth of the NFT purchasers’ cryptocurrency was diverted for Michel’s personal benefit. 


United States Attorney for the Eastern District of New York announced today the unsealing of a federal indictment charging three individuals with securities fraud, wire fraud, and money laundering in connection with the SafeMoon digital asset. The trio of defendants are accused of orchestrating a scheme that misled investors and misappropriated millions in investor funds. Press Release

The government charges that the defendants allegedly misrepresented the security measures of SafeMoon's liquidity pool, deceiving investors about the pool being "locked" and, therefore, safe from manipulation. Contrary to their statements, the DOJ charges the defendants retained access to the liquidity pool and engaged in a "rug pull," a nefarious strategy common in the cryptocurrency world where developers withdraw all funds from a project, abandoning the investors.

SafeMoon, which saw its market cap soar to over $8 billion, attracted investors with its unique transaction tax feature, promising benefits like automatic distribution of tokens and increased liquidity. However, as the indictment alleges, rather than supporting investor interests, the executives diverted funds for extravagant personal purchases, such as luxury vehicles and real estate.


On August 29, 2023, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) unveiled proposed regulations on the sale and exchange of digital assets by brokers. This move is a component of the Biden-Harris Administration's rollout of the Infrastructure Investment and Jobs Act (IIJA) and aims to mitigate tax evasion through digital assets and narrow the tax gap.

I have published an e-book guiide to assist readers in understanding these proposed regs. Here's a link

Today in a Manhattan federal court, Nate Chastain, the former head of product at the leading NFT marketplace OpenSea, was sentenced. Although the formal judgment and sentence has not yet been released to to the public, several media sources report Chastain was sentenced to serve three months in federal prison following his conviction on fraud and money laundering charges in the first ever criminal prosecution of NFT “insider trading”.  Ex-OpenSea Executive Nate Chastain Gets 3 Months in Prison for Insider Trading 

The DOJ announced yesterday that it has returned an indictment charging the founders of Tornado Cash with money laundering and sanctions violations. DOJ Press Release Two individuals, Roman Storm and Roman Semenov, have been charged with operating Tornado Cash Service, a cryptocurrency mixer, which allegedly laundered more than $1 billion in criminal proceeds. The U.S. Department of Justice (DOJ) announced the unsealing of the indictment, detailing multiple charges against the defendants, including conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money transmitting business.