$3 Million Vanishes in Rug Pull

The United States has brought charges against three individuals linked to the Evolved Apes NFT scam of 2021. The NFT venture, which initially promised a video game for its users, surprisingly disappeared from the internet following its fundraising campaign. 

The U.S. Department of Justice (DOJ) accused the defendants of deceiving investors with false promises and pocking the proceeds.

Three Charged in Connection with Evolved Apes NFT Rug Pull

The United States Attorney’s Office for the Southern District of New York has taken significant action recently. The office announced charges against three individuals linked to a Non-Fungible Token (NFT) rug pull, Evolved Apes, from 2021.

The three individuals, Mohamed Rilaz Waleedh, Mohamed-Amin Atcha, and Daood Hassan, are facing money laundering and wire fraud charges. The DOJ’s lawsuit hinges on the Evolved Apes scheme launched in 2021, comprising a collection of 10,000 unique NFTs. 

The project promised access to a future video game, enticing investors with potential utility and rising NFT values. However, shortly after launch, the project took a turn for the worse.

The pseudonymous developer, “Evil Ape,” vanished within a week of the initial offering. According to a source, the developer disappeared with 798 Ether worth nearly $3 million at the time ($2.7 million based on current market rates).

Also, the project’s main X account and website went dark, leaving investors with worthless Ethereum-based NFTs and a sense of betrayal.

U.S. Attorney Damian Williams addressed the case, stating, “The defendants are accused of manipulating the value of digital artwork through false promises about a video game.”

Attorney Williams also noted that the defendants allegedly took investor money but failed to develop the game. Instead, they pocketed the funds. Although NFTs remain a novel technology, established laws still apply. The Attorney also noted that making false claims and promises to obtain money from investors is a crime.

Despite the massive loss, the Evolved Apes community isn’t ready to give up. Two community members, Mike Cryptobull and Josh CryptoBull, are leading the charge with a new project.

This potential new project, Fight Back Apes, will be linked to the original Evolved Apes artwork. Those who held Evolved Apes NFTs will automatically qualify for Fight Back Apes tokens.

One key goal is to stop the original developer from receiving royalties from future sales of Evolved Apes NFTs. Unlike Evolved Apes, in which one person controls everything, Fight Back Apes will use a multi-signature wallet. 

Rug Pulls: The Dark Side of the NFT World

The Evolved Apes is just one example of other similar issues in the crypto space. According to DeFi Rekt, a database tracking cryptocurrency, rug pulls have defrauded investors of over $14.5 billion since 2011. 

Notably, these sc@ms can target various projects within the cryptocurrency space. However, due to the market’s speculative nature, NFTs have become a particularly attractive target.

The largest rug pull on record involved Africrypt, a South African digital asset investment platform. In 2021, the founders of Africrypt allegedly absconded with a staggering 69,000 bitcoins, valued at nearly $3.6 billion at the time. 

The Evolved Apes incident serves as a stark reminder for all NFT investors. Before investing in any project, it’s crucial to do your research and be cautious.