NFTs
Three UK Suspects Charged by FBI for $2.7 Million. NFT Scam Scam
Three UK citizens have been charged by the FBI with conspiracy to commit wire fraud and money laundering for an NFT scheme known as “Evolved Apes”.
Mohamed-Amin Atch, Mohamed Rilaz Waleedh and Daood Hassan, all aged 23, were charged with fraud charges involving false promises to purchase the Evolved Apes NFTs would help develop a video game.
According to a recently published advertisement from the United States Attorney’s Office for the Southern District of New York, the suspects withdrew investor funds worth $2.7 million from thousands of people in 2021 and pocketed the proceeds into personal accounts.
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In the cryptocurrency industry, this type of scam is known as “pull rug.”
It involves advertising and selling a digital project to public investors, collecting funds, and then quietly shutting down the project or suddenly disappearing. The three suspects allegedly created and promoted the “Evolved Apes” NFT project.
The project’s profit promises included Ethereum cryptocurrency tokens added to a community wallet; as well as donations to charities “supporting endangered monkeys”, “fighting global hunger” and “creating prosthetic limbs”.
The creators and promoters of the Evolved Apes project sold the “10,000 unique NFTs” and raised around $2.7 million from buyers through public promises that the money raised would be used to develop a video game based on the digital images. The accused suspects claimed that the video game would increase the value of NFTs. But the video game project never happened and its website was closed.
According to Coindesk, which first reported unsealed indictment newsthe project’s anonymous developer, Evil Ape, “disappeared a week after launch, embezzling 798 Ether ($3 million at today’s price, $2.7 million at the moment) of the project’s funds.”
According to U.S. Attorney Damian Williams and FBI New York Assistant Director James Smith, the funds were transferred through multiple cryptocurrency transactions to the personal accounts of Atcha, Waleedh, and Hassan.
The charges – one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering – each carry a maximum sentence of 20 years in prison.
The charges were announced on June 6 due to the accusation against Atcha, Rilaz and Hassan being open.