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

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

  coindesk.com 2 h

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

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.

The United States Attorney’s Office for the Southern District of New York announced today that it has charged three in connection with a non-fungible (NFT) token rugpull from 2021 known as Evolved Apes.

Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are charged with wire fraud and money laundering, according to a release from the SDNY’s office.

Evolved Apes was a collection of 10,000 unique NFTs, which promised a videogame that never materialized, as the anonymous developer Evil Ape vanished a week after launch, siphoning 798 ether ($3 million at today’s price, $2.7 million at the current time) from the project’s funds.

«The defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame,» U.S. Attorney Damian Williams said in a statement. «They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal.»

In crypto parlance this type of maneuver is known as a rug pull, a type of exit scam in which developers raise funds from investors through the sale of tokens or NFTs, then abruptly shut down the project and disappear with the money.

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

The largest rug pull so far has been South African digital assets investment fund Africrypt which absconded with 69,000 bitcoins in 2021, worth nearly $4.8 billion.

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