U.S. Authorities Take Legal Action Against Three Individuals Involved in Evolved Apes NFT Scheme
The U.S. is prosecuting three individuals in connection with the fraudulent Evolved Apes NFT scheme that took place in 2021.
Evolved Apes was a non-fungible token project that promised a video game but disappeared soon after it raised funds.
The U.S. Attorney’s Office for the Southern District of New York has officially announced that Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are facing charges of wire fraud and money laundering in relation to the Evolved Apes rugpull incident.
The project involved the creation of 10,000 unique NFTs, with the developers promising a video game that was never delivered. Following the project’s launch, the anonymous developer known as Evil Ape vanished, ultimately embezzling 798 ether (equivalent to $3 million at the present rate or $2.7 million at the time) from the funds gathered.
“The defendants were involved in a scam designed to manipulate the value of digital artwork by making false claims about the development of a video game,” stated U.S. Attorney Damian Williams. “They allegedly took investors’ money, failed to create the game, and kept the profits. The world of digital art may be new, but our laws still apply: it is illegal to deceive people for financial gain.”
Within the cryptocurrency community, this type of deceitful maneuver is commonly referred to as a rug pull—a form of exit scam where project developers raise funds by selling tokens or NFTs to investors and subsequently vanish with the funds, leaving backers empty-handed.
According to De.Fi’s Rekt database, rug pulls have led to losses exceeding $14.5 billion since 2011, highlighting the severity of such scams within the crypto space.
To date, the most significant rug pull incident occurred last year with Africrypt, a South African digital assets investment fund that absconded with 69,000 bitcoins valued at almost $4.8 billion.