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U.S. Charges Three in Connection With Evolved Apes NFT Scam

Jun 6, 2024
    The U.S. has charged three individuals in connection with the Evolved Apes NFT scam from 2021.The NFT project promised a video game, but its website vanished shortly after it finished its fundraise.
As a seasoned crypto investor, I’ve seen my fair share of scams and rug pulls in the digital asset space. The latest development regarding the Evolved Apes NFT scam is a sad reminder of the risks involved in this new and unregulated industry.Three individuals have been indicted by the US Attorney’s Office for the Southern District of New York for orchestrating a fraudulent scheme involving Non-Fungible Tokens (NFTs) named “Evolved Apes” in 2021.

As a researcher, I came across a recent announcement from the Southern District of New York (SDNY) regarding three individuals: Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan. According to the SDNY’s statement, they are accused of committing wire fraud and money laundering offenses.

The “Evolved Apes” project consisted of 10,000 distinct NFTs, with the promise of a video game as an incentive. Sadly, the unidentified creator known as Evil Ape disappeared just a week after the launch, leaving behind empty promises and having taken approximately 798 ether ($3 million based on current prices, or $2.7 million at the time of disappearance) from the project’s funds.

The defendants are accused of orchestrating a deceitful scheme to inflate the value of digital artwork by making misleading claims about creating a video game. They reportedly collected investors’ funds, failed to develop the game, and kept the earnings for themselves instead. Regardless of its novelty, deceiving people for financial gain remains unlawful in the digital art marketplace as it does in more traditional arenas.

As a cryptocurrency analyst, I would describe a rug pull as follows: This is a deceitful tactic employed by unscrupulous individuals who create hype around a new crypto project, often involving the sale of tokens or NFTs to unsuspecting investors. Once they have successfully raised funds, they abruptly abandon the project and disappear with the money, leaving investors holding worthless digital assets.

According to De.Fi’s Rekt database, over $14.5 billion has been lost to rug pulls since 2011.

In 2021, Africrypt, a South African investment fund specializing in digital assets, made off with an astonishing 69,000 Bitcoins, equivalent to approximately $4.8 billion.

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2024-06-07 00:25