CluCoin Founder Faces 20 Years for $1.1M Crypto Fraud

The FBI plans to use NFTs to notify victims of Austin Michael Taylor's fraud scheme.

Austin Michael Taylor, the 40-year-old founder of CluCoin, has pleaded guilty to wire fraud, admitting to stealing over $1.1 million from investors. Initially marketed as a charitable project, CluCoin was later exposed as a scam after Taylor diverted funds to online crypto casinos. The fraudulent activities, which began in 2022, primarily involved gambling on platforms like Stake.com. Taylor misappropriated investor funds while promoting CluCoin and its spin-off ventures, such as NFTs and the metaverse-based game "Xenia."

Despite CluCoin's initial promise during its 2021 ICO, its trading volume and value plummeted. Taylor, a former Twitch streamer known as DNP3, confessed to his addiction-fueled misuse of investor funds in January 2023. Following his public admission, Taylor ceded control of the project to his business associates.

In a move reflecting the growing intersection of law enforcement and emerging technologies, the FBI plans to notify victims of Taylor's fraud scheme through non-fungible tokens (NFTs). This innovative approach marks a first for the FBI, further demonstrating the agency's adaptability to the evolving digital landscape. Previously, NFTs were used in legal contexts, such as serving court documents to hackers in a separate crypto-related case.

Taylor’s sentencing is scheduled for October 31, 2024, where he faces up to 20 years in prison. The court proceedings will be held before U.S. District Court Judge Jacqueline Becerra in the Southern District of Florida. As part of his plea agreement, Taylor has agreed to forfeit $1.14 million, which will be used for victim restitution.

The CluCoin case has left many investors devastated, with some losing thousands of dollars. One investor described the experience as "humiliating," noting the impact on personal relationships. Despite the low expectations of recovering their investments, many are hopeful that the FBI's involvement will bring some measure of restitution.

The U.S. Attorney’s Office encourages anyone who believes they are a victim of this fraud scheme to provide relevant information to the FBI.

photo source / Blockonome