Satoshi

Bitcoin

CluCoin

April

The Federal Bureau of Investigation is set to use non-fungible tokens (NFTs) to return $1.14 million in funds to victims involved in a crypto fraud scheme that began with the launch of a sham project called CluCoin in 2021.&nbsp;
According to an Aug. 21 <a data-ct-non-breakable="null" href="https://www.justice.gov/usao-sdfl/pr/founder-miami-based-cryptocurrency-token-clucoin-pleads-guild-wire-fraud" rel="null" target="null" text="null">statement</a> from the US Attorney’s Office in Florida, 40-year-old Austin Michael Taylor pled guilty to wire fraud on Aug. 15 for routinely using investor funds intended for his CluCoin (CLU) project to fund his online gambling habit.&nbsp;
The FBI will provide notice to “identified victims” of the planned restitution through their NFTs — marking one of the first times law enforcement has publicly stated it will use NFTs to contact victims.
The US Attorney’s Office also requested that anyone believed to be a victim in the fraud scheme <a data-ct-non-breakable="null" href="https://www.fbi.gov/CluCoinInvestors" rel="null" target="null" text="null">provide</a> relevant information to the FBI.
<h2 id="strong-the-clucoin-scheme-explained-strong">The CluCoin scheme explained</h2>
Taylor, better known by his online alias DNPThree, founded CluCoin in 2021, promising investors that the crypto scheme would have a “charitable focus.”
After raising funds, Taylor launched CLU by way of an initial coin offering (ICO) on May 19, 2021.&nbsp;
Following the launch of CLU, Taylor shifted his focus to minting NFTs, developing new computer games, and even proposed launching a metaverse platform.&nbsp;
According to court documents, Taylor organized a conference called “NFTCon: Into the metaverse” at a Miami hotel on April 4, 2022, to drum up further interest in CluCoin and its spin-off projects.&nbsp;
Following the event, Taylor began making withdrawals from a crypto wallet, which controlled a portion of CLU investor funds. Between May and December 2022, Taylor funneled a total of $1.14 million worth of investor funds to his own accounts on various crypto exchanges before transferring these funds to online casinos.&nbsp;
Taylor issued a public <a data-ct-non-breakable="null" href="https://x.com/DNPthree/status/1610367045442637824" rel="null" target="null" text="null">apology</a> for his actions in Jan. 2023, saying that he became “incredibly addicted to gambling” and added that he was “deeply sorry” for misusing investor funds.&nbsp;
<figure>
 <img alt="FBI will use NFTs to contact victims of crypto fraud scheme Clucoin" name="" src="https://s3.cointelegraph.com/uploads/2024-08/clucoin-is-officially-dead-twitlonger-from-dnp3-v0-m1wf3ghf6w9a1">
 <figcaption style="text-align: center;">
 Taylor issued a public apology after losing investors’ funds. Source: Reddit.
 </figcaption>
</figure>
Related:&nbsp; <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/satoshi-nakamoto-bitcoin-creator-fbi-foia-response" rel="null" target="null" text="null">FBI will ‘neither confirm nor deny’ the existence of Satoshi records</a>
Taylor agreed to pay back $1.14 million intended for victims’ restitution.&nbsp;
Taylor will face sentencing on Oct. 31 and faces a maximum sentence of 20 years in jail for wire fraud.&nbsp;
On Aug. 2, the FBI sent out a warning, asking web users to be vigilant of scammers pretending to be affiliated with crypto exchanges to steal users’ funds.
On June 4, the FBI also <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/fbi-crypto-scams-work-from-home-remote-working" rel="null" target="null" text="null">warned of a rise</a> in work-from-home job advertisement scams involving crypto, where scammers provide the illusion of a lucrative job but are just a way to steal digital assets.&nbsp;
Asia Express: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/bitcoin-mining-crackdown-epicenters-nft-phishing-scam-asia-express/" rel="null" target="null" text="null">Bitcoin miners steamrolled after electricity thefts, exchange ‘closure’ scam</a>

FBI will use NFTs to contact victims of crypto fraud scheme Clucoin

Table of Contents

Cointelegraph

Other articles published on Aug 23, 2024

Bitcoin faces $1.12B options expiry, can BTC hodl $60k?

Crypto Market Surges and Bitcoin Approaches Key Resistance

Cardano ADA Makes a Big Comeback into The Top 10 Ahead of Chang Hard Fork Update

Tether CEO says no plans for a ‘USDT Network’

Gate Ventures and Abu Dhabi Blockchain Center Launch $100M Web3 Fund

Ripple Swell 2024 Event to Feature Top Industry Speakers in Miami

Join our free newsletter for daily crypto updates!