Sun, June 16, 2024

Three Charged in $2.7M ‘Evolved Apes’ NFT Scam

NFT, Bored Apes, crypto

Quick Look:

  • Charges Filed: Three individuals charged with wire fraud and money laundering in ‘Evolved Apes’ NFT scam.
  • Project Details: Launched on 24th September 2021, with 10,000 NFTs and promises of a video game.
  • Collapse: Website down by 5th October 2021; $2.7 million raised, no game delivered.
  • Legal Actions: Defendants face up to 20 years in prison; $875,850 in Tether to be forfeited.
  • Context: Part of broader crypto scams, with over $14.5 billion lost since 2011.

The United States Attorney’s Office for the Southern District of New York has brought charges against three individuals concerning the ‘Evolved Apes’ NFT scam. Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan face serious allegations of conspiracy to commit wire fraud and money laundering.

The ‘Evolved Apes’ NFT collection launched on 24th September 2021. The project initially captivated the crypto community by promising to develop an exclusive video game for NFT holders. Comprised of 10,000 NFTs, the collection quickly garnered attention, with an initial floor price of $7.60. However, the ambitious project soon took a dark turn.

$2M Transferred on First Day of the ‘Evolved Apes’ Launch

By 5th October 2021, less than two weeks after its launch, the ‘Evolved Apes’ website mysteriously disappeared. The sudden disappearance triggered alarm bells among investors and the broader NFT community. It was later revealed that on the first day of the launch, a staggering $2 million was transferred, contributing to a total of $2.7 million raised through the scam. Promises of a video game never materialised, leaving investors out of pocket and disillusioned.

Three Face Up to 20 Years for NFT Scam

On 6th June 2024, the U.S. Attorney’s Office released a statement outlining the charges against Atcha, Waleedh, and Hassan. The legal implications for the defendants are severe, with each facing up to 20 years in prison for wire fraud and money laundering if convicted. U.S. Attorney Damian Williams emphasised that despite the novelty of digital art, the age-old principle that fraudulent promises are illegal still stands firm. The FBI’s Assistant Director, James Smith, echoed this sentiment, highlighting the breach of trust inherent in such deceptive practices.

The financial aftermath of the ‘Evolved Apes’ scam is significant. Authorities have moved to forfeit $875,850 in Tether (USDT) from a specified wallet address, demonstrating a concerted effort to recover some of the lost funds. The wallet in question is identified as 0x519…6ed70, reflecting the transparency and traceability intrinsic to blockchain technology.

$875,850 in USDT Forfeited from NFT Scam

This case is part of a broader pattern of fraudulent activity within the crypto space. To date, one of the most significant ‘rug pulls’ involved Africrypt, a South African digital assets investment fund, where approximately $4.8 billion worth of 69,000 bitcoins vanished. According to the REKT database, which tracks losses in the cryptocurrency domain, over $14.5 billion has been lost to scams and fraudulent schemes since 2011.

‘Evolved Apes’ Scam Totals $14.5B Since 2011

The ‘Evolved Apes’ NFT scam underscores the importance of vigilance and due diligence in the burgeoning field of digital assets. As technology evolves, so do the methods employed by those seeking to exploit it. The charges against Atcha, Waleedh, and Hassan are a stark reminder that while digital art and NFTs represent new frontiers, the fundamental principles of honesty and integrity remain unchanged.

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