Federal authorities in Miami announced that victims of the CluCoin cryptocurrency scam on the BNB Chain will be notified through NFTs after the project’s co-founder, Austin Michael Taylor, pled guilty to wire fraud. Taylor, who launched CluCoin (CLU) in 2021, admitted to misappropriating $1.14 million of investor funds, which were intended for project development, and instead gambled the money away in online casinos.
The U.S. Attorney’s Office for the Southern District of Florida announced that, for the first time, NFTs—unique blockchain tokens—will be used to communicate with victims in a federal case. This groundbreaking method aims to reach the identified scam victims, highlighting a new application of blockchain technology in law enforcement communications.
Taylor, who had gained a substantial following of 242,000 on Twitch under the username DNP3, initially pitched CluCoin as a community-driven project meant to generate ongoing income for charitable causes. However, the focus later shifted to developing a video game and metaverse platform. Taylor never disclosed his misuse of funds until January 2023, when he publicly apologized for his actions.
Despite Taylor’s assurances and efforts to attract investors—including hosting an event titled “NFTCon: Into the Metaverse” in Miami—CluCoin’s value has plummeted. At its peak, the project had a market capitalization of $17 million, but it now stands at approximately $62,000, with negligible trading volume.
Victims, who are to be notified via NFTs, expressed skepticism about recovering their losses. One investor, Vlad, who lost $1,000, noted that while he hopes the FBI’s involvement might help, he’s not optimistic about restitution. Similarly, another investor named Kevin described the experience as humiliating, having lost over $2,000 and the trust of family members he persuaded to invest.
The U.S. Department of Justice (DOJ) indicated that Taylor could face up to 20 years in prison for his wire fraud conviction, with sentencing scheduled for October 31 before U.S. District Judge Jacqueline Becerra.
The use of NFTs to notify victims in this case builds on a precedent set last year, where NFTs were used to serve court documents in a separate legal matter. Legal experts, like Rafael Yakobi of The Crypto Lawyers, view this as a positive step in modernizing legal practices to incorporate emerging technologies.
