Three UK Individuals Charged by FBI for $2.7 M. ‘Evolved Apes’ NFT Fraud Scheme

Three UK nationals have been charged by the FBI with conspiracy to commit wire fraud and money laundering for an NFT scheme known as “Evolved Apes.”

Mohamed-Amin Atch, Mohamed Rilaz Waleedh, and Daood Hassan, all 23 years of age, were charged on allegations of running a scam with false promises the purchase of the Evolved Apes NFTs would help develop a video game.

According to a recently published announcement from the United States Attorney’s office for the Southern District of New York, the suspects took the investor funds of $2.7 million from thousands of people in 2021 and pocketed the proceeds to personal accounts.

In the cryptocurrency industry, this type of scam is known as a “rug pull.”

It involves the advertising and sale of a digital project to public investors, the collection of funds, and then quietly shutting down the project or suddenly disappearing. The three suspects allegedly created and promoted the NFT project “Evolved Apes.”

The promises for the profits of the project included Ethereum cryptocurrency tokens added to a community wallet; as well as donations to charities “supporting endangered apes”, “fighting global hunger” and “creating prosthetic limbs”.

The creators and promoters of the Evolved Apes project sold the “10,000 unique” NFTs and collected a reported $2.7 million from purchasers through public promises the money raised would be used to develop a videogame based on the digital images. The accused suspects claimed the videogame would increase the value of the NFTs. But the project’s videogame never happened and its website was shut down.

According to Coindesk, which first reported news of the unsealed indictment, the project’s anonymous developer Evil Ape “vanished a week after launch, siphoning 798 ether ($3 million at today’s price, $2.7 million at the current time) from the project’s funds.”

According to US Attorney Damian Williams and FBI New York Field Office Assistant Director James Smith the funds were transferred through multiple cryptocurrency transactions to the personal accounts of Atcha, Waleedh, and Hassan.

The charges—one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering—each carry a maximum sentence of 20 years in prison.

The charges were announced on June 6 due to the indictment against Atcha, Rilaz, and Hassan being unsealed.