NFTs
New York court charges suspects linked to $3 million carpet removal
The United States Attorney for the Southern District of New York announced the indictment of three UK citizens over the $3 million ‘Evolved Apes’ NFT (non-fungible tokens) scheme. The suspects face charges of wire fraud and money laundering.
$3 Million ‘Evolved Apes’ NFT Rug Pull
On Thursday, Damian Williams, U.S. Attorney for the Southern District of NY, and James Smith, Assistant Director of the New York Field Office of the Federal Bureau of Investigation (“FBI”), revealed charges against three individuals apparently linked to the evolved apes. . pull rug.
As reported by Bitcoinist, In 2021 the anonymous developer of the ‘Evolved Apes’ NFT project, Evil Ape, disappeared with the project’s funds. The project has been described as “a collection of 10,000 unique NFTs trapped within a lawless land.”
'Evolved Apes' Collection screengrab from OpenSea. Source: Vice.com
In one week, ‘Evolved Apes’ raised around $2.9 million in Ether (ETH) after promising to develop a fighting game for its community. However, these promises soon disappeared when the team drained the project wallet, taking all 798 ETH and excluding account X and the project’s official website.
According to a report from Vice, investors noticed several warning signs before the rug was pulled. Investors told the media outlet that, following the public sale of the NFTs, the announcements were “unprofessional” and the team left the project. Despite the concerns, they believed the ‘Evolved Apes’ NFT was inexperienced.
Suspects face fraud and money laundering charges
Three years later, the identity of the alleged developers was revealed. A New York courtroom indicted UK citizens Mohamed-Amin Atcha, Mohamed Rolaz Waleedh and Daood Hassan for laundering “misappropriated funds through multiple cryptocurrency transactions” to “conceal their ill-gotten gains”.
The suspects were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. If they are guilty, they could face up to 20 years in prison on each charge.
U.S. Attorney Williams explained that fraudulent investors, regardless of medium or industry, must be held accountable for their fraudulent actions. He stated:
Digital art may be new, but old rules still apply: making false promises of money is illegal. As we allege, thousands of people believed these false promises and were tricked into purchasing these NFTs, including here in the Southern District of New York. NFT fraud is not gambling and those responsible will be held accountable.
Likewise, FBI Assistant Director in Charge James Smith stated that the FBI is committed to tracking scammers:
Ghosting customers not delivering on a promise not only reflects a lack of business integrity, but also violates the implicit trust that buyers place in sellers when purchasing a product, no matter whether that product is in a store or stored on a blockchain. The FBI remains committed to pursuing those who perpetrate fraudulent schemes out of a selfish desire for quick profit.
It is important to note that since 2021, the NFT market has seen a significant decline from its glory days during the last cycle. A recent report revealed that the once bustling NFT market is now full of collectibles with zero value.
Interest from NFT investors and collectors has declined drastically over the past two years and 95% of NFTs have lost value. Consequently, 75% of digital artworks and collectibles that could previously sell for up to $91.8 million are valued below $100 in 2024.
ETH is trading at $3,782 in the three-day chart. Source: ETHUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com