For American justice, the case is heard. The virtual images of the “Mutant Ape Planet” series that plagiarize one of the most famous collections of NFTs, these non-fungible tokens that allow you to claim ownership of a computer file, seem like yet another scam at the exit. This led to the arrest in New York of Aurélien Michel, this Breton suspected of being the main administrator of the project.
Two million investors victims
This type of scam has become one of the scourges of the crypto-asset community. During a “rug-pull” in the jargon of the community, “pulling the carpet” in French, it is a question of launching a cryptoasset to resell its shares at the highest level before its value collapses. According to the company Solidus Labs, a company in the tracking of flows on blockchain
, the number of victims is staggering. In two years, two million investors have lost funds in nearly 200,000 suspicious projects.
“The perpetrators of these scams make their project shine, suggesting that there will be significant returns on investment, summarizes Éric Ruffié, specialist in web investigations. They take advantage of their victims’ gullibility and take the money as soon as they can.” Example with the Squid Game crypto scam, which usurped the name of the famous Netflix series.
Fake media
The offer was tempting on paper. The holders of the token had to, through the games, earn other cryptocurrencies. But there was the eel under the rock. The creators of the crypto-asset were not who they claimed to be, notably claiming false support from well-known figures.
In the fall of 2021, the price of this crypto-asset reaches new heights. The developers then sell their shares, a hoard estimated at around three million dollars. Once finished, the souffle deflates and the price of the cryptocurrency plummets, causing investors to lose their stake.
Lawsuits
While these scams are thriving, the victims aren’t completely helpless. Because some cases lead to prosecution. “The authorities are now sanctioning situations that have not been prosecuted so far,” notes specialist lawyer Romain Chilly.
A judicial response favored by a better knowledge by the investigative services of the universe of crypto-assets. But also thanks to the “crypto winter”, this sudden collapse of a market that until now had been structurally on the rise, including scams, revealing the most bogus projects in passing.
“Crypto has been widely criticized for being a tool that facilitates money laundering or illicit transactions,” adds Romain Chilly. But we see at the same time that it is a formidable tool for identifying offenders. It is thanks to the analysis of the transactions on the blockchain that we are able to identify the suspects”.
Surveys just a click away
Because the blockchain is anything but synonymous with anonymity. Holders of a crypto wallet are identified by a pseudonym. And you can track their transactions in a sort of public ledger. This also allows simple anonymous people, such as crypto star investigator ZachXBT, to contribute.
The search for this Internet user followed by more than 346,000 people on Twitter, confirmed by the French police, therefore led to the indictment of five suspects this autumn in Paris. Not a case of scam this time, but a simple theft of NFTs from the “Bored Ape” collection. Estimated, however, at the time, at around 2.5 million dollars…
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How to avoid scams
Are you a fan or curious about NFTs and are you looking to invest while avoiding scams? “Look at the project leader’s crypto portfolio: if the outflows are greater than the inflows, this can be a warning sign,” notes Éric Ruffié for example. And follow some common sense advice. Watch out for exaggerated plans and unrealistic promises and check if the image attached to the NFT did not already exist before the token was created. And ask yourself if Investor Relations is hosted in, say, a chat room on messaging app Discord — it’s really not a big deal.