NFTs
US charges three UK citizens in connection with ‘Evolved Apes’ NFT rug pull – DL News
- The US alleges that the defendants raised NFT prices with promises to develop a video game.
- The ‘Evolved Apes’ video game never materialized.
- Instead, funds from NFT sales disappeared.
US Attorney’s Office for the Southern District of New York said in one declaration charged three UK citizens in connection with a 2021 carpet scam involving a collection of 10,000 NFTs called ‘Evolved monkeys.’
Mohamed-Amin Atcha, Mohamed Rilaz Waleedh and Daood Hassan, all 23, were charged with wire fraud and money laundering, according to the statement. Each charge carries a maximum prison sentence of 20 years.
According to the indictment, the three carried out a type of scam commonly known as “rug pulling”, in which developers advertise a digital project, collect funds from buyers, then abandon the project and keep the funds – in that case798 Ethereum worth around $2.7 million at the time.
U.S. Attorney Damian Williams said “the defendants created a fraud to inflate the price of digital art through false promises about video game development. They allegedly took funds from investors, never developed the game and pocketed the profits.”
Williams added: “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.”
The statement alleged that the three laundered the embezzled funds through multiple cryptocurrency transactions into their own personal accounts.
DL News reported early last year, rug pulls and related scams totaled about US$760 millionaccording to data from blockchain security firm Quantstamp