According to Cointelegraph, the Federal Bureau of Investigation (FBI) is set to utilize non-fungible tokens (NFTs) to return $1.14 million to victims of a crypto fraud scheme linked to a sham project called CluCoin, which began in 2021.

An Aug. 21 statement from the US Attorney’s Office in Florida revealed that 40-year-old Austin Michael Taylor pled guilty to wire fraud on Aug. 15. Taylor had been using investor funds intended for his CluCoin (CLU) project to support his online gambling habit. The FBI will notify identified victims of the planned restitution through NFTs, marking one of the first instances where law enforcement has publicly announced the use of NFTs to contact victims.

The US Attorney’s Office has also requested that anyone who believes they are a victim of the fraud scheme provide relevant information to the FBI. Taylor, known online as DNPThree, founded CluCoin in 2021, promising a charitable focus for the crypto scheme. After raising funds, Taylor launched CLU via an initial coin offering (ICO) on May 19, 2021. He then shifted his focus to minting NFTs, developing new computer games, and proposing a metaverse platform.

Court documents indicate that Taylor organized a conference called “NFTCon: Into the Metaverse” at a Miami hotel on April 4, 2022, to generate further interest in CluCoin and its related projects. Following the event, Taylor began withdrawing funds from a crypto wallet that held a portion of CLU investor funds. Between May and December 2022, he transferred a total of $1.14 million worth of investor funds to his accounts on various crypto exchanges before moving these funds to online casinos.

In January 2023, Taylor issued a public apology for his actions, admitting to an addiction to gambling and expressing deep regret for misusing investor funds. He agreed to repay the $1.14 million intended for victims’ restitution. Taylor is scheduled for sentencing on Oct. 31 and faces a maximum sentence of 20 years in prison for wire fraud.

On Aug. 2, the FBI issued a warning urging web users to be cautious of scammers posing as affiliates of crypto exchanges to steal funds. Additionally, on June 4, the FBI warned of an increase in work-from-home job advertisement scams involving crypto, where scammers create the illusion of lucrative jobs to steal digital assets.