🐻 Who is the crypto police after in 2023? 👮‍♂️

Crypto CEOs & rug pullers on the chopping block

Author

Build in Bear
January 09, 2023

GM, happy Monday friends. You survived the first week of 2023, but what does the rest of the year have in store for us? It’s looking like more layoffs, stricter regulation and more charges. Are you ready for it?

In this issue, we’re digging into recent charges in crypto:

  • Mutant Ape Planet charged for NFT rug pull

  • DCG faces US investigation

  • Ex-Celsius CEO sued for fraud

Mutant Ape Planet charged for NFT rug pull

2021 was a breakout year for NFT scams and rug pulls. Unfortunately, 2022 was no better. According to Solidus Labs’ annual rug pull report, over 100,000+ scam tokens were launched in 2022, up 40% from the previous year.

Despite the number of ruggers, only three NFT projects have officially been prosecuted for scamming investors. Mutant Ape Planet was the most recent case.

Here's the story. Aurelien Michel, the 24-year-old rugger launched Mutant Ape Planet at the beginning of the year. By February 2022, the collection was 70% sold out and generated $2.9 million in sales. He quickly began to empty the funds into his KYC’ed wallet that had his personal info attached to it, like name, email and phone number. Smart move.

With that information, US authorities were able to arrest him at the travel border.

It seems like an absolute amateur move made by an inexperienced scammer, but this was apparently not Michel’s first rug pull.

On-chain data linking to his CEX address shows that he was likely involved in the $1.1 million Fashion Ape NFT scam and the $1.6 million rug of Crazy Camels.

Was he just careless or oblivious? Either way, ruggers will continue to get smarter and more sophisticated with their manipulation tactics. Beware.

DCG faces US investigation

For the past few weeks, DCG/Genesis has been hanging on a string with FUD circulating around their insolvency and imminent bankruptcy. At this point, everyone is expecting them to be the next major crypto company to fold.

Last week, Gemini publicly called out DCG/Genesis for commingling funds and demanded the return of over $900 million belonging to their customers.

This week, news broke that US authorities are reportedly investigating DCG’s financials. On top of that, DCG confirms that they are shutting down their wealth management division and Genesis announces laying off 30% of their staff.

Hello, bankruptcy? Something tells us that things are about to get far messier.

Ex-Celsius CEO sued for fraud

Since the whole FTX debacle, news around Celsius Network has been quietly flying under the radar. As one of the first crypto companies to fall victim to bankruptcy, the ex-CEO of Celsius is finally being sued for defrauding investors.

According to the lawsuit issued by the New York Attorney General, Mashinsky misled investors and failed to communicate, to the full extent, the risk of using their services and their financial troubles.

Jail cells are about to get packed this year.

In other news

Q1 crypto layoffs are here. On the roster so far, we’ve got Huobi, Wyre, SuperRare, Silvergate and Genesis.

Polygon continues to dominate as the web3 partner of choice for mainstream brands.

SEC objects Binance US’ deal to acquire bankrupt Voyager. What does this say about Binance?

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