NFTs
Three UK Citizens Charged in $2.7 Million NFT Fraud
The FBI has charged three British men with conspiracy to commit wire fraud and money laundering in connection with an alleged NFT scam dubbed “Evolved Apes.” Mohamed-Amin Atch, Mohamed Rilaz Waleedh and Daood Hassan, all 23, are accused of defrauding investors by falsely claiming that purchasing NFTs from Evolved Apes would fund the development of a video game.
According to a statement from the United States Attorney’s Office for the Southern District of New York, the trio allegedly embezzled $2.7 million from thousands of investors in 2021. Instead of using the funds to develop the promised video game, they allegedly transferred the money to personal accounts.
This type of scam, known in the cryptocurrency industry as “rug pulling,” involves launching a digital project, attracting public investment, and then abruptly shutting down the project and disappearing with the funds. The defendants allegedly promoted and sold 10,000 Evolved Apes NFTs, promising that the proceeds would support charitable causes and the creation of a video game.
The project assured investors that profits would be allocated to a community wallet, donations to charities for endangered apes, efforts to combat global hunger and the creation of prosthetic limbs. The video game, they claimed, would increase the value of NFTs. However, the game never came to fruition and the project website ended up being closed.
Coindesk, which first reported the unsealed indictment, revealed that the project’s anonymous developer, Evil Ape, disappeared a week after its launch, taking 798 Ether (equivalent to $3 million today, $2.7 million then). of your funds.
US Attorney Damian Williams and FBI New York Assistant Director James Smith said the stolen funds were funneled through several cryptocurrency transactions before reaching the personal accounts of Atch, Waleedh and Hassan.
Each of the three men faces one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, with each count carrying a maximum sentence of 20 years in prison.
The charges were announced on June 6, following the release of the indictment against Atch, Waleedh and Hassan.
A Brief History of Evolved Ape vs Bored Ape NFTs
Evolved Apes started out as an exciting and innovative project, but became a notorious example of a rug-pulling scam. The story of its rise and fall is a crucial lesson for the NFT community and investors. It emphasizes the importance of caution, thorough research, and skepticism in the face of lucrative but uncertain opportunities in the digital art and blockchain sectors.
The Evolved Apes saga has significantly impacted the NFT space, serving as a stark reminder of the risks involved in the largely unregulated market. He highlighted the importance of due diligence and greater transparency and accountability in NFT projects. The incident also highlighted the potential for exploitation in the rapidly evolving crypto landscape.
Meanwhile, Bored Ape Yacht Club (BAYC) remains one of the most influential and successful non-fungible token (NFT) projects in the burgeoning world of digital art and blockchain technology. Launched in April 2021 by Yuga Labs, BAYC quickly became a cultural phenomenon, attracting significant attention from the crypto community and mainstream media.
Its emphasis on community and utility sets BAYC apart from other NFT projects. Each Bored Ape NFT functioned like a membership card to an exclusive club, granting holders access to numerous benefits. This included access to a members-only graffiti board called “The Bathroom,” exclusive events, and upcoming NFT drops. Building a community around NFTs has added significant value beyond the artwork itself.
Bored Ape NFTs have transcended the digital art space to become a cultural icon. They’ve appeared in music videos, been used as avatars on social media profiles, and appeared in merchandise and brand collaborations. The Bored Ape Yacht Club has also inspired several other NFT projects, contributing to the broader NFT boom.