Nfts
Three British nationals charged in $2.7 million NFT scam
The FBI has charged three British men with conspiracy to commit wire fraud and money laundering in connection with an alleged NFT scam dubbed “Evolved Apes.” Mohamed-Amin Atch, Mohamed Rilaz Waleedh and Daood Hassan, all 23, are accused of defrauding investors by falsely claiming that the purchase of Evolved Apes NFTs would finance the development of a video game.
According to a statement from the U.S. Attorney’s Office for the Southern District of New York, the trio allegedly embezzled $2.7 million from thousands of investors in 2021. Instead of using the funds to develop the promised video game, they allegedly transferred money to personal accounts.
This type of scam, known in the cryptocurrency industry as a “rug pull,” involves launching a digital project, attracting public investment, then abruptly shutting down the project and disappearing with the funds. The defendants allegedly promoted and sold 10,000 Evolved Apes NFTs, promising that the proceeds would be used to support charitable causes and the creation of a video game.
The project assured investors that profits would go toward a community portfolio, donations to endangered ape charities, efforts to combat world hunger, and the creation of prosthetic limbs. Video gaming, they claimed, would increase the value of NFTs. However, the game never saw the light of day and the project’s website was eventually shut down.
Coindesk, which was first to report the unsealed indictment, revealed that the project’s anonymous developer, Evil Ape, disappeared a week after its launch, taking 798 ether (the equivalent of $3 million today, $2.7 million at the time) of its funds.
U.S. Attorney Damian Williams and FBI New York Field Office Deputy Director James Smith said the stolen funds were routed through several cryptocurrency transactions before landing in the personal accounts of Atch, Waleedh and Hassan.
Each of the three men faces one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, with each count punishable by maximum sentence of 20 years in prison.
The charges were announced on June 6 after the indictment against Atch, Waleedh and Hassan was revealed.
A Brief History of Evolved Ape vs Bored Ape NFTs
Evolved Apes started as an exciting and innovative project, but became a notorious example of a rug pulling scam. The story of its rise and fall is a crucial lesson for the NFT community and investors. It highlights the importance of caution, thorough research and skepticism when faced with lucrative but uncertain opportunities in the digital art and blockchain sectors.
The Evolved Apes saga has had a significant impact on the NFT space, serving as a stark reminder of the risks involved in a largely unregulated market. He stressed the importance of due diligence and greater transparency and accountability in NFT projects. The incident also highlighted the potential for exploitation in the rapidly evolving crypto landscape.
Meanwhile, Bored Ape Yacht Club (BAYC) remains one of the most influential and successful non-fungible token (NFT) projects in the burgeoning world of digital art and blockchain technology. Launched in April 2021 by Yuga Labs, BAYC quickly became a cultural phenomenon, attracting attention from the crypto community and mainstream media.
The focus on community and utility sets BAYC apart from other NFT projects. Each Bored Ape NFT served as a membership card to an exclusive club, giving holders access to various benefits. These included access to a members-only graffiti board called “The Bathroom,” exclusive events, and future NFT launches. Building a community around NFTs has added significant value beyond the artwork itself.
Bored Ape NFTs have transcended the digital art space to become a cultural icon. They have appeared in music videos, been used as avatars in social media profiles, and have been featured in product and brand collaborations. The Bored Ape Yacht Club has also inspired many other NFT projects, contributing to the broader NFT boom.