Nfts
Three British nationals charged over “Evolved Apes” NFT scam
The United States Attorney today announced charges against three British nationals for their involvement in the “Evolved Apes” NFT fraud scheme.
U.S. Attorney for the Southern District of New York Damian Williams and James Smith, Deputy Director of the FBI’s New York Field Office, announcement the revelation of an indictment accusing three British nationals: Mohamed-Amin Atcha, Mohamed Rilazh Waleedh and Daood Hassan, of conspiracy to commit wire fraud and money laundering.
“Evolved Apes” Rug Pull Scam
The charges relate to their scheme to defraud victims through the sale of non-fungible tokens (NFTs) from the “Evolved Apes” collection.
According to the indictment, Atcha, Waleedh and Hassan orchestrated a “carpet pulling” scam in fall 2021. In crypto vocabulary, a rug pull is a type of exit scam in which developers first collect money from investors through the sale of tokens or NFTs, and then suddenly stop the project and disappear with the funds raised.
Evolved Apes was a collection of 10,000 unique NFTs. They advertised the NFT project in such a way that the funds raised would be used to develop a related video game which, in turn, would increase the value of the NFTs.
The promised video game never materialized as anonymous developer “Evil Ape” disappeared a week after launch, siphoning off 798 ether. [approximately $3 million at today’s market price and $2.7 million at the time] project funds.
The trio then laundered the embezzled funds via multiple cryptocurrency transactions to their personal accounts, the indictment states.
“As alleged, the defendants ran a scam to drive up the price of digital artwork through false promises about developing a video game. They allegedly took investors’ funds, never developed the game, and pocketed the profits. Digital art may be new, but the old rules still apply: making false promises of money is illegal. -Williams
Williams said thousands of people were tricked into believing their false promises and thus purchased these NFTs. But “NFT fraud This is not a game and those responsible will be held accountable,” he said.
FBI Deputy Director James Smith called the trio “ghost customers” and carrying out the NFT scam “out of a selfish desire to make a quick profit.”
“[This] Not only does this reflect poor business integrity, but it also violates the implicit trust that buyers place in sellers when purchasing a product, whether that product is in a store or stored on a blockchain. – Blacksmith
Atcha, Waleedh and Hassan, all 23, are charged with conspiracy to commit wire fraud and money laundering, both of which carry a maximum sentence of 20 years in prison.
Actual sentences will be determined by a judge based on the U.S. Sentencing Guidelines and other statutory factors.
Carpet pulls and their troubled history
Rug pulls and cryptocurrency scams have would have has cost people $27 billion to date. The total number of such incidents stands at 861, with the largest so far being OneCoin, which cost $4 billion in stolen funds.
OneCoin, at its peak, had over 3 million active members worldwide. To date, this is believed to be the most “successful” crypto scam, as the search continues for its perpetrator, “Cryptoqueen” Ruja Ignatova. She was added to the FBI file.Ten Most Wanted Fugitives List’ in July 2022 – where it is today.
The missing Cryptoqueen was reported dead in unconfirmed reports, but an investigation by BBC The team, whose results were released last week, said the investigation team received details of Ignatova’s various sightings and location information even after her alleged murder took place. She would have links with the Bulgarian underworld, to whom she also entrusts her physical security.