In a significant development, three British nationals connected to the “Evolved Apes” non-fungible token (NFT) “rug pull” scam are facing charges in the United States for allegedly conspiring to commit wire fraud and money laundering.
The defendants, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, stand accused of artificially inflating the prices of 10,000 NFTs by making false promises of developing a video game associated with the project. However, after raising funds, they purportedly abandoned the project and siphoned off the funds, leaving investors empty-handed.
U.S. Attorney Damian Williams underscored the seriousness of the situation, emphasizing that despite the novelty of digital art, traditional legal standards apply. He stressed that perpetrating fraud in the realm of NFTs is unlawful and those responsible will face consequences.
Echoing this sentiment, FBI Assistant Director James Smith highlighted the breach of trust between buyers and sellers, emphasizing the importance of integrity in business dealings.
The alleged scam saw nearly 800 Ether (ETH), valued at $2.7 million at the time, being illicitly obtained from investors. The defendants purportedly pocketed over $2 million from Evolved Ape NFT sales, capitalizing on the NFT hype during “NFT summer” in September 2021.
The Evolved Apes project purportedly had a detailed roadmap and phases outlined on its website, including plans for a fighting game exclusive to Evolved Ape NFT holders. However, the website was abruptly taken down less than two weeks after the project’s launch, leaving investors disillusioned.
A noteworthy aspect of the case is Waleedh’s attempt to transfer stolen funds to a personal wallet, only to be blocked by the cryptocurrency exchange. Subsequently, he falsely claimed the need for funds to pay for his grandmother’s cancer treatment to regain access to the funds.
The U.S. Attorney’s Office is seeking the forfeiture of $875,850 in Tether (USDT) held in a specific wallet address linked to the alleged scam.
The charges of conspiracy to commit wire fraud and money laundering each carry a maximum prison sentence of 20 years in New York, underscoring the severity of the allegations against the defendants.
