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Three UK Nationals Charged in $3 Million NFT Scam
Three UK nationals, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan, have been charged with orchestrating a $3 million scam related to the “Evolved Apes” NFT collection, as announced by the U.S. Department of Justice on Thursday. The charges include wire fraud and money laundering in what authorities have described as a pump-and-dump scheme.
The Department of Justice revealed that the charges are a result of a 2021 scheme that aimed to persuade NFT collectors to purchase one of the “10,000 unique” Ethereum-based NFTs called Evolved Apes, which were supposedly going to be used in an online battle royale game. However, the defendants managed to abscond with 798 ETH, valued at around $2.7 million at the time.
U.S. Attorney for the Southern District of New York, Damian Williams, stated, “As alleged, the defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds.”
Aggressive Promotion and False Promises
Atcha and Waleedh were accused of aggressively promoting Evolved Apes, even going as far as hiring an unnamed social media influencer to endorse the project. The pump-and-dump scheme relied on misleading information to entice investors to buy the NFTs, artificially inflating their value before selling off and disappearing, leaving investors with worthless tokens.
According to court documents, Waleedh posed as the lead marketing manager for Evolved Apes when attempting to withdraw funds from a cryptocurrency exchange they were using. Once he gained access to the funds, he allegedly transferred them to a cryptocurrency address controlled by Hassan.
Williams warned, “Digital art may be new, but old rules still apply: making false promises for money is illegal. As we allege, thousands of people believed these false promises and were tricked into buying these NFTs, including here in the Southern District of New York. NFT fraud is no game, and those responsible will be held accountable.”
Consequences and Ongoing Issue
If convicted, the three individuals face a maximum sentence of 20 years in federal prison. This case is just one example of the rampant rug pulls and scams in the cryptocurrency space. Recently, other schemes have made headlines, including a livestreamed rug pull by a supposed “mother and son” duo that resulted in a $300,000 loss for investors.
Another scheme involved a creator shilling the “HANDS” meme coin, assuring viewers that he couldn’t rug them, only to reveal his hands before selling the accumulated assets, leaving investors at a loss. These incidents serve as a reminder of the risks and challenges present in the cryptocurrency and NFT markets.
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