Feds Charge UK Nationals With $3 Million ‘Evolved Apes’ Ethereum NFT Scam
Three UK nationals, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, have been charged with orchestrating a $3 million scam related to the "Evolved Apes" Ethereum NFT collection, according to the U.S. Department of Justice (DOJ). The trio is accused of wire fraud and money laundering in what authorities describe as a pump-and-dump scheme.
The scam, which began in 2021, involved convincing NFT collectors to purchase one of 10,000 unique Ethereum-based NFTs called Evolved Apes, under the false promise that these NFTs would be used in an online battle royale game. However, instead of developing the game, the defendants allegedly pocketed 798 ETH, valued at approximately $2.7 million at the time.
U.S. Attorney for the Southern District of New York, Damian Williams, stated, "As alleged, the defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds."
The DOJ claims that Atcha and Waleedh aggressively promoted Evolved Apes, including hiring an unnamed social media influencer to market the project. A pump-and-dump scheme involves enticing investors to buy an asset based on misleading information, inflating its price, and then selling off the assets and disappearing, leaving investors with worthless tokens.
Waleedh, who identified himself as the lead marketing manager for Evolved Apes, attempted to withdraw funds stuck on an unnamed cryptocurrency exchange. Once allowed access, he allegedly transferred the funds to a cryptocurrency address controlled by Hassan.
Williams emphasized that despite the novelty of digital art, traditional legal principles still apply, stating, "Digital art may be new, but old rules still apply: making false promises for money is illegal. 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. NFT fraud is no game, and those responsible will be held accountable."
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