Nfts
New York court charges suspects linked to $3 million carpet mining
The United States Attorney for the Southern District of New York announced the indictment of three British nationals in connection with the $3 million “Evolved Apes” NFT (non-fungible token) scam. The suspects face wire fraud and money laundering charges.
$3M “Evolved Apes” NFT Rug Raffle
On Thursday, Damian Williams, U.S. Attorney for the Southern District of New York, and James Smith, Deputy 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 the carpet.
As reported According to Bitcoinist, in 2021, the anonymous developer of the “Evolved Apes” NFT project, Evil Ape, disappeared with the project’s funds. The project was described as “a collection of 10,000 unique NFTs trapped in a lawless country.”
'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 quickly disappeared when the team drained the project wallet, taking the 798 ETH and deleting the X account and the official project website.
According to a report from Vice, investors noticed several red flags before the rug was pulled. Investors told media that after the public sale of the NFTs, the announcements were “unprofessional” and the team disengaged from the project. Despite concerns, they believed the “Evolved Apes” NFT was inexperienced.
Suspects face fraud and money laundering charges
Three years later, the identity of the suspected developers was revealed. A New York court indicted British nationals Mohamed-Amin Atcha, Mohamed Rolaz Waleedh and Daood Hassan are accused of laundering “funds misappropriated via multiple cryptocurrency transactions” in order to “hide 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 guilty, they face up to 20 years in prison on each charge.
U.S. Attorney Williams explained that fraudulent investors, regardless of media or industry, should be held accountable for their fraudulent actions. He stated:
Digital art may be new, but the old rules still apply: making false promises of money is illegal. As we allege, thousands of people believed these false promises and were lured into purchasing these NFTs, including here in the Southern District of New York. NFT fraud is not a game and those responsible will be held accountable.
Similarly, James Smith, Assistant FBI Director in Charge, stated that the FBI is committed to tracking down fraudsters:
Ghosting customers without delivering on a promise not only reflects poor business integrity, but also violates the implicit trust buyers place in sellers when purchasing a product, whether that product is in a store or stored on a blockchain. The FBI remains committed to pursuing those who commit fraudulent schemes in a selfish desire to make a quick profit.
It is worth noting that since 2021, the NFT market has seen a significant decline compared to its glory days of the last cycle. A recent report revealed that the once-buzzing NFT market is now full of worthless collections.
Investor and collector interest in NFTs has declined significantly over the past two years, and 95% of NFTs have become worthless. As a result, 75% of digital artwork and collectibles that could once be sold for up to $91.8 million are valued at less than $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