The Federal Bureau of Investigation (FBI) is preparing to contact victims of Clucoin, a 2021 crypto fraud scheme. The law enforcement agency plans to refund $1.14 million to these victims using non-fungible tokens (NFTs).
The decision came after the founder of the crypto scheme pleaded guilty to wire fraud in a US federal court.
FBI to Repay Victims of CluCoin Fraud Scheme Via NFTs
The Federal Bureau of Investigation (FBI) Miami Division plans to distribute $1.14 million to victims of the 2021 crypto fraud scheme Clucoin through NFTs.
The US Attorney’s Office in Florida released a statement indicating the plan. The statement revealed that 40-year-old Austin Michael Taylor, Clucoin’s co-founder, pleaded guilty to wire fraud on August 15.
Taylor admitted that he used investors’ funds initially intended for funding the Clucoin (CLU) project to finance his virtual gambling habit.
The FBI said it would notify the identified project victims of its plans to repay their lost funds using NFTs. Further, the FBI Miami Division requested that all the affected victims forward relevant information to the agency to aid the restitution process.
Recently, the FBI has indicated its commitment to fighting crypto-related fraud. In June, the agency alerted the public to the increasing number of crypto scams flooding the internet.
It noted that most scammers post work-from-home job adverts to create deceptive, lucrative jobs. However, such fraudsters always aim to get digital assets from potential victims.
Also, earlier this month, the FBI warned web users to remain cautious about online scammers to avoid losing funds. Again, the agency mentioned that most bad actors now claimed affiliations with prominent crypto exchanges to deceive customers.
Details of CluCoin Crypto Fraud Scheme
Austin Taylor, also known as DNPThree, has pleaded guilty to wire fraud via his crypto fraud scheme project, CluCoin. He said he would restitute the stolen $1.14 million to the scam victims.
Meanwhile, on October 31, Taylor will face sentencing, with a possible maximum sentence of 20 years imprisonment. Taylor’s fraudulent story started in 2021 when he founded CluCoin. He also owns CLU LLC, a Miami-based entity that handled CluCoin’s operations.
Using his extensive social media following, Taylor garnered several investors for his CLU project via its initial coin offering (ICO). He informed the investors that the CLU project would operate with a “charitable focus.”
After the CLU launch in May 2021, Taylor moved into other activities, such as minting NFTs and creating computer games. Also, he laid out plans to develop a metaverse platform.
Further, in April 2022, Taylor held a conference titled “NFTCon: Into the metaverse.” The meeting aimed to attract more investors for CluCoin and other lined-up projects.
Following his gambling addiction, Taylor siphoned all investors’ funds from the CluCoin project. He withdrew about $1.14 million between May and December 2022. However, in January 2023, he released an apology for his action, stating how deeply sorry he was.
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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