Three Individuals Charged Over Evolved Apes NFT Scam

According to CoinDesk, the United States Attorney's Office for the Southern District of New York has charged three individuals in relation to the Evolved Apes non-fungible token (NFT) scam that occurred in 2021. The individuals, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, are facing charges of wire fraud and money laundering. Evolved Apes was an NFT project that promised a unique video game. The project consisted of 10,000 unique NFTs and raised funds through the sale of these tokens. However, the game never materialized, and the website disappeared shortly after the fundraising was completed. The anonymous developer, known as Evil Ape, allegedly vanished a week after the project's launch, taking with him 798 ether, equivalent to $3 million at today's price or $2.7 million at the time. U.S. Attorney Damian Williams stated that the defendants allegedly ran a scam to inflate the price of digital artwork through false promises about the development of a video game. They are accused of taking investor funds, failing to develop the game, and pocketing the proceeds. Williams emphasized that while digital art may be a new field, the old rules still apply, and making false promises for money is illegal. This type of scam, known as a 'rug pull', involves developers raising funds from investors through the sale of tokens or NFTs, then abruptly shutting down the project and disappearing with the money. The De.Fi's Rekt database reports that over $14.5 billion has been lost to rug pulls since 2011. The largest rug pull to date involved the South African digital assets investment fund Africrypt, which disappeared with 69,000 bitcoins in 2021, worth nearly $4.8 billion.