In a significant legal move, the United States Attorney’s Office for the Southern District of New York has charged three persons connected to an infamous NFT scam called Evolved Apes. Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are among the individuals accused of wire fraud and money laundering in the fraudulent scheme.
Previously known as Bandfruit, Evolved Apes was initially marketed as 10,000 unique NFTs, with the plan of using the generated funds to fund the creation of a video game of the same name. However, the initiative’s future seemed promising. Still, in an unexpected turn of events, the project was left in the hands of its only creator, known by the pen name Evil Ape, only seven days after its launch. This unexpected deceit resulted in about 798 ether being stolen from the project fund, equating to about $3 million in present value.
US Attorney Damian Williams condemned the fraud, emphasizing the danger of guaranteeing investors’ dishonesty. In Williams’ opinion, they conducted a provably premeditated scheme to create the illusion that digital art is associated with a video game development project when it is not. They allegedly embezzled funds from investors without providing the opportunities and services they had initially agreed to while pocketing the money. Even though digital art is still a relatively new phenomenon, art remains subjected to traditional legislation – giving out false assurances in exchange for monetary compensation is prohibited.
The occurrence raises awareness of the issue of ‘rug pulls’ prevalent in cryptocurrency. This fraud involves raising funds for an initial coin offering or NFT project and then running away with the cash while providing investors with worthless tokens. Sadly, this sort of fraud is increasingly prevalent, as indicated by statistics from the De. Fi Rekt database shows that more than $145 billion has been siphoned through rug pulls since 2011.
One of the most high-profile cases of fraudulent practice was the African cryptocurrency investment firm Africrypt, which disappeared with 69,000 bitcoins. This amount is equivalent to about $4.8 billion in current valuation in 2021 standard.
Recent changes in the Evolved Apes case demonstrate that investing in digital assets, especially those without legislation or unknown developers, is highly risky. These legal actions also reveal the readiness of the American police to protect conventional legal norms in such new areas of digital and crypto property and bring any developers involved in such fraud to justice.
