Online gambling financed by stolen funds, admits crypto founder

Lea Hogg August 23, 2024

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Online gambling financed by stolen funds, admits crypto founder

Austin Michael Taylor, the founder of the crypto project CluCoin and owner of CLU LLC, has pleaded guilty to wire fraud. Taylor, 40, admitted to transferring $1.14 million of investor funds to his personal account and using the money for online gambling. He leveraged his large social media following to promote CluCoin’s initial coin offering (ICO) in May 2021, which initially promised a charitable focus. However, Taylor later diverted funds to other projects, including NFTs, a computer game, and a metaverse platform.

In April 2022, Taylor organized an event called “NFTCon: Into the Metaverse” to boost interest in CluCoin. Shortly after, he began withdrawing investor funds and using them at online casinos. Taylor’s sentencing is set for 31 October, where he faces up to 20 years in prison. The FBI is investigating the case, and victims are encouraged to contact the FBI for restitution.

Taylor’s journey began in the spring of 2021 when he launched CluCoin, a crypto project he promoted to his substantial online following as a charitable initiative. The initial coin offering (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 plummeted soon after, leading Taylor to divert the project from its original charitable mission.

Crypto founder pleaded guilty to wire fraud

Throughout 2022, Taylor continued to assure investors of CluCoin’s potential, including the development of a metaverse-based video game named “Xenia.” Behind the scenes, however, Taylor had a severe gambling addiction. He secretly transferred $1.14 million of investor funds to online casinos, including Stake.com, as revealed by his lawyers.

The deception came to light in January 2023 when Taylor publicly confessed to misusing investor funds for gambling. He subsequently relinquished control of CluCoin to his business associates. On 15 August, Taylor pleaded guilty to one count of wire fraud. As part of his plea agreement, he has agreed to forfeit the $1.14 million he misappropriated, which will be used for victim restitution.

Taylor’s sentencing is scheduled for 31 October , where he will appear before U.S. District Court Judge Jacqueline Becerra of the Southern District of Florida. The maximum sentence for his crime is 20 years in prison.

New to market in May 2021, crypto Clu Coin hit a market cap of almost $136 million.