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DOJ and FBI Unveil Charges Against 3 UK Nationals in NFT Rug Pull Scam

The U.S. Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) have unveiled charges against three UK nationals for a fraudulent non-fungible token (NFT) scheme involving “Evolved Apes,” promising a game development. “They allegedly took investor funds, never developed the game, and pocketed the proceeds.”

US Charges 3 UK Nationals in NFT Rug Pull Scam

The U.S. Attorney’s Office for the Southern District of New York and the New York Field Office of the Federal Bureau of Investigation (FBI) announced on June 6 the unsealing of an indictment charging Mohamed-Amin Atcha, Mohamed Rilazh Waleedh, and Daood Hassan, all UK nationals, with “conspiracy to commit wire fraud and money laundering.”

The defendants face charges from their fraudulent scheme, which deceived victims into buying digital artwork from the “Evolved Apes” non-fungible token (NFT) collection. U.S. Attorney Damian Williams described:

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.

“Thousands of people believed these false promises and were tricked into buying these NFTs, including here in the Southern District of New York,” he stressed.

FBI Assistant Director in Charge James Smith commented: “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 videogame, 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. The FBI remains committed to pursuing those who perpetrate fraudulent schemes out of a selfish desire for a quick profit.”

According to the indictment, in the fall of 2021, the three defendants “executed a type of scam commonly known as a ‘rug pull,’ where developers advertise a digital project, collect funds from purchasers, then abandon the project and keep the funds.” They allegedly “created and promoted an NFT project called ‘Evolved Apes’ that involved the marketing of digital images of cartoon apes.”

The announcement details:

Atcha, 23, Waleedh, 23, and Hassan, 23, all United Kingdom nationals, are charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years in prison.

Source: Bitcoin

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