New York lawyer indicts 3 in connection with ‘Evolved Apes’ NFT fraud
Three Britons involved in the “Evolved Apes” non-fungible token “rug pull” scam have been indicted in the United States on charges of conspiracy to commit wire fraud and money laundering.
Defendants Mohamed-Amin Atcha, Mohamed Rilaz Waleedh and Daood Hassan allegedly increased the price of 10,000 NFTs with false promises to develop the video game before transferring funds and abandoning the project. The Southern District of New York said in a June 6 statement:
“Digital art may be new, but the old rules still apply. Application: It is illegal to make false promises for money. (…) NFT fraud is not a game and those responsible must be held accountable,” U.S. Attorney Damian Williams reiterated.
FBI Deputy Director James Smith added, “Defrauding customers without delivering on promises not only reflects low business integrity, but also violates the implicit trust that buyers place in sellers when purchasing a product.”
A total of 800 ETH (worth $2.7 million at the time) were reportedly stolen from Rug Pool.
“They say they took investor money, didn’t develop the game, and kept the proceeds,” Williams said.
Related: Coffeezilla accuses AI company Rabbit of NFT fraud.
Atcha, Waleedh, and Hassan made over $2 million from Evolved Ape NFT sales on the first day. The U.S. Attorney’s Office believes the sale occurred on September 24, 2021, in the middle of the “NFT summer.”
U.S. prosecutors alleged that the website listed a “Roadmap” and “Phases” subsection to make the NFT project appear legitimate, claiming that “Phase 5” would release a fighting game that would only be accessible to Evolved Ape NFT holders. I did.
However, the Evolved Apes website was shut down less than two weeks later, on October 5, 2021, leaving investors stranded.
Interestingly, Waleedh transferred the stolen funds to a personally managed wallet address, but the withdrawal of the funds was blocked by the cryptocurrency exchange.
They planned to first investigate the source of the funds, but customer service re-enabled the withdrawal feature after Waleedh falsely stated she needed the funds to pay for her grandmother’s cancer treatment, the U.S. Attorney’s Office said.
The U.S. Attorney’s Office said the three defendants had wallet addresses “0x519…” They want to confiscate $875,850 of Tether (USDT) held at 6ed70”.
The wire fraud conspiracy and money laundering charges each carry up to 20 years in prison in New York.
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