Nfts
US charges three British nationals over ‘Evolved Apes’ NFT scam
U.S. federal prosecutors have charged three British nationals with conspiracy to commit fraud and money laundering for their involvement in a scam to sell non-fungible tokens, or NFTs, of digital artwork known as name “Evolved Apes”.
Mohamed-Amin Atcha, Mohamed Rilaz Waleedh and Daood Hassan allegedly drove up the prices of NFTs with false promises of developing a video game based on the characters. Prosecutors said thousands of people were lured into buying NFTs.
“They allegedly took funds from investors, never developed the game and pocketed the profits,” said U.S. Attorney Damian Williams. in a report. “Digital art may be new, but the old rules still apply: making false promises of money is illegal. »
In an unsealed indictment, prosecutors alleged that the “rug pull” scam ran from March to September 2021, as the three men, each aged 23, announced the development of a fighting game on a website that has since been taken down.
“The website expressly tied gameplay to the value of the NFTs,” prosecutors wrote in the indictment, explaining that the three men promised daily tournaments in which certain characters’ NFTs would increase in value based on how many fights they would win.
The alleged scammers made at least $2 million from their scheme just one day after the first NFT sales on September 24, 2021. The website was shut down on October 5 of the same year.
A cryptocurrency platform used by the alleged fraudsters quickly blocked Waleedh from withdrawing his “share,” prosecutors said. Waleedh allegedly called customer service and falsely claimed he needed money to pay for his grandmother’s cancer treatment. In December, some of Hassan’s assets were frozen by the government.
Atcha, Waleedh and Hassan face up to 20 years in prison on each charge if convicted.
Evolved Apes should not be confused with the Bored Ape Yacht Club, a similar project selling NFTs of 10,000 apes anthropomorphized into cartoons. Although Atcha, Waleedh, and Hassan began development on their project in March 2023, a month before Bored Apes’ release, Evolved Apes apparently launched later in the year.
Bored Apes, developed by Yuga Lubs, had a huge success and allowed the company to be valued at $4 billion in 2022.
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