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Three Britons Accused of NFT Fraud and Money Laundering in the US

Evolved Apes

Three British people connected to the nonfungible token “Evolved Apes” have been accused in the United States of allegedly planning to commit wire fraud and money laundering.

Allegations and Scheme Details

The United States Attorney’s Office in the Southern District of New York reportedly said in a June 6 statement that the defendants, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, allegedly drove up the prices of 10,000 NFTs on false promises that they would create a video game before transferring the funds out and abandoning the project.

“Digital art is new, but old regulations still apply: it is unlawful to make false promises for money […] NFT fraud is no game; those guilty will be held responsible,” said U.S. Attorney Damian Williams.

FBI Assistant Director James Smith added: “Ghosting customers without fulfilling a promise not only reflects poor business integrity, it also violates the implicit trust buyers place in sellers when purchasing a product.”

Allegedly stolen from the rug pull, around 800 Ether (ETH) valued at $2.7 million at the time was taken overall.

Execution of the Fraud

“They apparently pocketed the money, never developed the game, and took investor money,” Williams added.

The U.S. Attorney’s Office thinks that Atcha, Waleedh, and Hassan hauled in more than $2 million from Evolved Ape NFT sales on the first day, which fell in the heart of “NFT summer.”

The U.S. Attorney said the “roadmap” and “phase” subsections on its website helped to give the NFT initiative credibility. “Phase 5” promised that only Evolved Ape NFT holders would be able to access a fighting game that Evolved Apes would release.

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Investors were left stranded when the Evolved Apes website was removed less than two weeks later, on October 5, 2021.

Attempts to Cover Up

Fascinatingly, Waleedh moved the pilfered money to a personal, custodied wallet address, but the bitcoin exchange stopped him from taking the money out.

Originally intending to “investigate the source,” the customer support staff reenabled the withdrawal feature when Waleedh falsely claimed he needed the money to cover his grandmother’s cancer treatment, according to the U.S. Attorney’s Office.

The three defendants are expected to turn over $875,850 in Tether (USDT) kept at wallet address “0x519…6ed70.”

Charges of money laundering and wire fraud each carry a potential 20-year jail term in New York.

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