New York prosecutor accuses Evolved Apes NFT creators of fraud

A fraudulent scheme involving the sale of non-fungible tokens (NFTs) known as the Evolved Apes Collection has been exposed, leaving investors stranded.

The creators, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh and Daood Hassan, all British nationals, are focused towards charges of conspiracy to commit wire fraud and money laundering. The trio allegedly promised to develop a video game tied to the NFT collection, but disappeared with investors’ funds after a week, in what is known as a rug-pulling scam.

The charges allege that Atcha, Waleedh, and Hassan ran a classic rug-pulling scam, in which they advertised the Evolved Apes NFT project, collected funds from buyers under the promise of developing a video game, and then disappeared with the funds.

The program sold digital images of cartoon monkeys as NFTs in order to use the profits to improve the video game as intended. However, after collecting substantial sums from buyers, particularly in the Southern District of New York, the defendants shut down the project’s website and kept the funds without fulfilling their promises.

Despite the disappearance of the creators and the exposure of the fraudulent scheme, trading of Evolved Apes NFTs on platforms like OpenSea has continued.

FBI Deputy Director James Smith said: “Ghosting customers without keeping a promise not only reflects poor business integrity, but it also violates the implicit trust that buyers place in sellers when purchasing a product. product. »

Waleedh, after allegedly stealing cryptocurrency, made a critical mistake. He transferred the stolen funds to a personal wallet address held by a custodian (a third-party service that manages the wallet). Fortunately, this depository prevented him from withdrawing the money.

Initially, the custodian planned to investigate the origin of the funds before authorizing a withdrawal. However, Waleedh lied to customer service, saying he urgently needed money for his grandmother’s cancer treatment, according to the U.S. Attorney’s Office.

Subsequently, a new project called Fight Back Apes emerged, launched by the affected community. Unlike Evolved Apes, Fight Back Apes works with a multi-signature wallet to ensure transparency and avoid similar incidents in the future.

Read also: New York AG sues NovaTech and AWS Mining for billion-dollar fraud

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