Three UK nationals have been charged by the U.S. Attorney for their involvement in the “Evolved Apes” NFT fraud scheme. The announcement was made by Damian Williams, the United States Attorney for the Southern District of New York, and James Smith, the Assistant Director of the New York Field Office of the FBI. The indictment charges Mohamed-Amin Atcha, Mohamed Rilazh Waleedh, and Daood Hassan with conspiracy to commit wire fraud and money laundering.
The charges stem from a scheme in which the three individuals defrauded victims through the sale of non-fungible tokens (NFTs) from the “Evolved Apes” collection. This fraudulent activity took place in the fall of 2021 when Atcha, Waleedh, and Hassan orchestrated a “rug pull” scam. In the world of cryptocurrencies, a rug pull is a type of exit scam where developers raise funds from investors through token or NFT sales and then disappear with the raised funds.
The “Evolved Apes” project involved a collection of 10,000 unique NFTs, with the promise of using the funds raised to develop a related video game that would increase the NFTs’ value. However, the promised video game never materialized, and the anonymous developer known as “Evil Ape” vanished shortly after the project’s launch, taking approximately $3 million in ether from the project’s funds.
Subsequently, the trio laundered the misappropriated funds through multiple cryptocurrency transactions to their personal accounts. U.S. Attorney Damian Williams highlighted the defendants’ actions as a classic example of making false promises for financial gain, emphasizing that such behavior is illegal.
Thousands of individuals were deceived into purchasing these NFTs based on false promises, leading to significant financial losses. FBI Assistant Director James Smith condemned the trio for deceiving customers and prioritizing personal profit over ethical business practices. He emphasized the importance of trust between buyers and sellers, regardless of whether the product is physical or digital.
The three individuals, all aged 23, are facing charges of conspiracy to commit wire fraud and money laundering, each carrying a maximum sentence of 20 years in prison. The final sentencing will be determined by a judge based on various factors.
The incident involving the “Evolved Apes” NFT fraud scheme is just one example of the pervasive issue of rug pulls and cryptocurrency scams. Reports suggest that such scams have cost individuals billions of dollars, with the largest rug pull to date involving the OneCoin scam, which defrauded investors of $4 billion.
OneCoin, led by the infamous “Cryptoqueen” Ruja Ignatova, attracted millions of members worldwide before being exposed as a fraudulent scheme. Ignatova, who remains a fugitive, was added to the FBI’s Ten Most Wanted list in 2022. Despite unconfirmed reports of her death, investigations reveal potential sightings and ties to the Bulgarian underworld, raising questions about her whereabouts and ongoing criminal activities.
The case of the “Evolved Apes” NFT fraud scheme serves as a stark reminder of the risks associated with digital investments and the importance of due diligence in the increasingly popular world of non-fungible tokens and cryptocurrencies. Authorities are committed to holding those responsible for such fraudulent activities accountable, ensuring justice for victims and deterring future scams.