Nfts
Three UK suspects indicted by FBI over $2.7 million NFT fraud scheme
Three British nationals have been charged by the FBI with conspiracy to commit wire fraud and money laundering in connection with an NFT scheme known as “Evolved Apes.”
Mohamed-Amin Atch, Mohamed Rilaz Waleedh and Daood Hassan, all aged 23, were charged with running a scam with false promises regarding the purchase of the evolved monkeys. NFT would help develop a video game.
According to a recently published announcement from the United States Attorney’s Office for the Southern District of New York, the suspects took $2.7 million in investor funds from thousands of people in 2021 and pocketed the proceeds in personal accounts.
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In the cryptocurrency industry, this type of scam is known as “pull the carpet.”
It involves advertising and selling a digital project to public investors, raising funds, and then quietly shutting down the project or suddenly disappearing. The three suspects allegedly created and promoted the “Evolved Apes” NFT project.
The project’s profit promises included Ethereum cryptocurrency tokens added to a community wallet; as well as donations to charities “supporting endangered apes,” “fighting world hunger,” and “creating prosthetics.”
The creators and promoters of the Evolved Apes project sold the “10,000 unique NFTs” and raised $2.7 million from buyers thanks to public promises that the money raised would be used to develop a video game based on the images digital. The accused suspects claimed that video gaming would increase the value of NFTs. But the project’s video game never saw the light of day and its website was shut down.
According to Coindesk, which first reported news of unsealed indictmentthe project’s anonymous developer, Evil Ape, “disappeared a week after launch, siphoning off 798 ether ($3 million at current price, $2.7 million at present) of the project’s funds.”
According to U.S. Attorney Damian Williams and FBI New York Field Office Deputy Director James Smith, the funds were transferred via multiple cryptocurrency transactions to the personal accounts of Atcha, Waleedh and Hassan.
The charges – one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering – each carry a maximum sentence of 20 years in prison.
The charges were announced on June 6 due to the indictment against the unsealing of Atcha, Rilaz and Hassan.