Three British nationals involved in the “Evolved Apes” NFT “rug pull” scam have been charged in the United States with conspiracy to commit wire fraud and money laundering.
The accused, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, allegedly inflated the prices of 10,000 NFTs by falsely promising to develop a video game, then transferred the funds and abandoned the project, according to a June 6 statement from the U.S. Attorney’s Office in the Southern District of New York.
“Digital art may be new, but old rules still apply: making false promises for money is illegal […] NFT fraud is no game, and those responsible will be held accountable,” iterated U.S. Attorney Damian Williams.
FBI Assistant Director James Smith added: “Ghosting customers without fulfilling a promise not only reflects poor business integrity, it also violates the implicit trust buyers place in sellers when purchasing a product.”
The scam reportedly resulted in the theft of nearly 800 Ether (ETH), valued at $2.7 million at the time. Williams stated that the defendants took investor funds, never developed the promised game, and kept the proceeds. The U.S. Attorney’s Office indicated that the defendants earned over $2 million from Evolved Ape NFT sales on September 24, 2021, during the peak of “NFT summer.”
The project’s website initially featured a “roadmap” and phases to appear credible, with “Phase 5” promising a fighting game exclusive to Evolved Ape NFT holders. However, the website was shut down less than two weeks later, on October 5, 2021, leaving investors stranded.
Waleedh allegedly transferred the stolen funds to a personal wallet, but the cryptocurrency exchange blocked withdrawals to investigate the source. The exchange eventually allowed the withdrawal after Waleedh falsely claimed he needed the funds for his grandmother’s cancer treatment.
The U.S. Attorney’s Office seeks to confiscate $875,850 in Tether (USDT) held in a specific wallet address. The charges for conspiracy to commit wire fraud and money laundering each carry a maximum prison sentence of 20 years in New York.