Crypto Scheme Founder Seeks Probation Over Prison Sentence

According to Cointelegraph, Austin Michael Taylor, the founder of the CluCoin cryptocurrency scheme, has requested a Miami federal court to grant him probation instead of a prison sentence. Taylor, who pleaded guilty to wire fraud last year for misappropriating $1.1 million in investor funds for online gambling, submitted a sentencing memo on February 11. This plea for probation would allow him to serve his sentence outside of prison. However, prosecutors have recommended a prison term of approximately two and a half years. Taylor's legal representative stated that he acknowledges his lapse in judgment and has taken responsibility for his actions. The memo highlighted that Taylor completed an in-hospital mental health treatment program before his guilty plea and continues to attend Gamblers Anonymous meetings. Taylor admitted to wire fraud in August, related to his CluCoin scheme, which involved launching a token called CLU in May 2021. He later expanded the scheme to include non-fungible tokens (NFTs) and promised the development of a computer game and metaverse platform. By May 2022, Taylor had withdrawn cryptocurrency from wallets containing investor funds, subsequently losing approximately $1.14 million through online casino gambling by December 2022. At the time of his plea, the FBI announced plans to notify victims of restitution through their NFTs, marking one of the first instances of law enforcement using this medium for victim communication. In his memo, Taylor expressed his commitment to repaying victims, initially offering $25,000 and indicating his ability to make larger payments if granted probation. He also highlighted his 15 years of military-related service, suggesting that this could be considered for a reduced sentence under the guidelines. Meanwhile, prosecutors argued for a 27-month prison sentence followed by three years of supervised release, emphasizing the need to deter others from exploiting cryptocurrency for fraudulent purposes. The government stressed the importance of sending a strong message that exploiting cryptocurrency to deceive investors will lead to significant prison sentences. They noted the increasing prevalence of fraudulent cryptocurrency investments across the United States and urged the court to make clear that such exploitation will not be tolerated. Taylor's sentencing hearing is scheduled for February 14.