Three people have been charged by the U.S. Attorney’s Office for the Southern District of New York in connection with the 2021 non-fungible token (NFT) fraud involving Evolved Apes. According to a press release from the SDNY, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are accused of wire fraud and money laundering.
Ten thousand distinct NFTs made up Evolved Apes, which also supposedly included a videogame that was never released. The developer, Evil Ape, went missing shortly after the launch and took off with 798 ether, which is currently worth $2.7 million but was worth almost $3 million at the time of the occurrence.
U.S. Attorney Damian Williams states, “The defendants falsely claimed they would develop a videogame, orchestrating a scheme to inflate the value of digital artwork.” They allegedly stole investor money, didn’t produce the game, and made money off of the project. Even if digital painting is a new field, deceiving people for financial advantage is still prohibited by law.
This dishonest strategy is known in the cryptocurrency community as a “rug pull,” which is a type of exit scam in which project developers acquire money from investors through token or NFT sales, only to suddenly abandon the business and disappear with the funds. Since 2011, rug pulls have cost more than $14.5 billion in losses, according to the De.Fi Rekt database. Africrypt, a South African digital assets investment fund, vanished in 2021 with 69,000 bitcoins worth around $4.8 billion, making it one of the biggest instances.
