New York Court Charges Three UK-Nationals Linked to ‘Evolved Apes’ NFT Rugpull

The United States Attorney for the Southern District of New York, has charges three UK-nationals, for their involvement wire fraud and money laundering, linked to the “Evolved Apes” non-fungible token (NFT) scam.

Announced Thursday, the court charged Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, And Daood Hassan, involved in a rugpull. They allegedly defrauded victims to purchase NFTs.

“Evolved Apes” collection of NFTs on the OpenSea marketplace had 10,000 digital collectibles, which promised developing a highly-profitable videogame. However the creation of a videogame was a scam, which never made any profits.

The perpetrators quickly shut down the project’s website and kept the funds without developing the videogame, the court document read. Further, they laundered the “misappropriated funds” using multiple cryptocurrencies.

“As alleged, 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.

“They allegedly took investor funds, never developed the game, and pocketed the proceeds.”

In October 2023, the Evolved Apes project developers disappeared with $2.9 million, the then price for 798 ETH. The three defendants created a pump-and-dump scheme, later transferring the proceeds of the fraud to their personal accounts.

FBI Takes Action Against Evolved Apes NFT Fraud

Attorney Williams noted that though NFTs are new and nascent, such scams still come under old rules for money laundering. He assured that those responsible for the fraud will “be held accountable.”

“As we allege, thousands of people believed these false promises and were tricked into buying these NFTs, including here in the Southern District of New York,” he added.

Each of the defendants of the Evolved Apes have one count of conspiracy to commit wire fraud and money laundering. They will receive a maximum sentence of 20 years in prison, the court noted.

The Federal Bureau of Investigation (FBI) has throughout been gathering information on the issue. “The FBI remains committed to pursuing those who perpetrate fraudulent schemes out of a selfish desire for a quick profit,” said FBI Assistant Director-in-Charge James Smith.