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

The US has charged three people in connection with the Evolved Apes NFT scam from 2021.

The NFT project promised a video game, but the website disappeared shortly after completing the fundraising.

The United States Attorney’s Office for the Southern District of New York announced today that it has charged three individuals 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 statement from the SDNY office.

Evolved Apes was a collection of 10,000 unique NFTs, promising a video game that never materialized as anonymous developer Evil Ape vanished from the project a week after launch, withdrawing 798 ether ($3 million at today’s price, currently $2.7 million) . source of money.

“The defendants ran a scam to inflate the price of digital artworks by making false promises to develop a video game,” U.S. Attorney Damian Williams said in a statement. said. “They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but the old rules still apply: It’s illegal to make false promises for money.”

In crypto parlance, such a maneuver is known as rug pulling, 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, more than $14.5 billion has been lost due to rug pulling since 2011.

The biggest case so far has been South African digital asset investment fund Africrypt, which ran away with 69,000 bitcoins worth about $4.8 billion in 2021.