The founder of the cryptocurrency project CluCoin and owner of CLU LLC, Austin Michael Taylor, admitted to committing wire fraud. The 40-year-old Taylor confessed to transferring $1.14 million of investor funds into his personal account and using the money for online gambling. He leveraged his large social media following to promote the initial coin offering (ICO) of CluCoin in May 2021, which was initially promised to focus on charity. However, Taylor later diverted the funds to other projects, including NFTs, computer games, and metaverse platforms.
In April 2022, Taylor organized an event called "NFTCon: Entering the Metaverse" to boost interest in CluCoin. Shortly thereafter, he began withdrawing investor funds for use in online casinos. Taylor's sentencing is scheduled for October 31, when he will face up to 20 years in prison. The FBI is investigating the case and encourages victims to contact the FBI for compensation.
Taylor's journey began in the spring of 2021 when he launched CluCoin, a cryptocurrency project he promoted to his extensive online followers as a charitable project. The ICO in May 2021 saw a surge in trading volume and value. However, this success was short-lived. According to court documents, the value of CluCoin soon plummeted, leading Taylor to shift the project away from its original charitable mission.
Crypto Founder Admits to Wire Fraud
Throughout 2022, Taylor continued to assure investors of CluCoin's potential, including the development of a metaverse-based video game called "Xenia." However, behind the scenes, Taylor had a severe gambling addiction. According to his lawyer, he secretly transferred $1.14 million of investor funds to online casinos, including Stake.com.
In January 2023, Taylor publicly admitted to misappropriating investor funds for gambling, exposing the fraudulent activity. Subsequently, he transferred control of CluCoin to his business partner. On August 15, Taylor pleaded guilty to a charge of wire fraud. As part of the plea agreement, he agreed to forfeit the misappropriated $1.14 million, which will be used to compensate victims.
Taylor's sentencing is set for October 31, when he will be tried by Judge Jacqueline Becerra of the United States District Court for the Southern District of Florida. The maximum penalty for his crime is 20 years in prison.
The cryptocurrency CluCoin was launched in May 2021, reaching a market value of nearly $136 million.
