“Evolved Apes” NFT scammers face 40 years in prison after stealing 2.7M from investors

Three United Kingdom nationals have been charged with conspiracy to commit wire fraud and conspiracy to commit money laundering in connection with the “Evolved Apes” non-fungible tokens (NFT) scam.

Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan have been charged in connection with an NFT scam that attempted to defraud victims into investing in a collection of NFTs known as “Evolved Apes” back in 2021.

These NFTs are digital images depicting cartoon apes “trapped inside a lawless land,” OpenSea said. According to the NFT marketplace, Evolved Apes has a collection of roughly 10,000 NFTs.

The trio claimed they needed investments to develop a video game based on the NFTs that would increase the value of the NFTs bought by investors.

According to Vice, the unknown developer of Evolved Apes, known as ‘Evil Ape,’ disappeared along with the project's Twitter account and website.

Vice explains that the anonymous developers left clues about how much money they had stolen from investors. The trio acquired approximately 798 ether, or $2.7 million, and then transferred it through multiple cryptocurrency transactions.

“The creators and promoters of the Evolved Apes project publicly promised to use funds raised from selling the NFTs to develop a video game based on the NFTs, which they claimed would increase the NFTs’ value,” the DOJ said.

However, after selling the NFTs and receiving large sums from investors the project was abandoned, and Atcha, Waleedh, and Hassan pocketed the money for themselves.

The trio then laundered the embezzled funds via multiple cryptocurrency transactions and deposited the money into their personal accounts.

“These three defendants allegedly were part of a scheme to pump up the price of NFTs with lies to the public about developing a related video game and to surreptitiously transfer the proceeds of the fraud to their personal accounts. 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, no matter if that product is in a store or stored on a blockchain,” FBI Assistant Director James Smith said.

The trio executed a rug pull scheme, an exit scam in which creators advertise a digital product like tokens or NFTs. They sell these products and then abandon the project once funds have been acquired. The product the victim is left with is often worthless, leaving those who bought the product high and dry.

All members associated with the scheme have been charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. Each charge carries a maximum penalty of 20 years in prison