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07/06/24
158
Three UK Nationals Charged to Court in New York for NFT Scam
On June 6, the United States Attorney’s Office of the Southern District of New York published a press release noting an indictment charging three UK nationals with conspiracy to commit wire fraud and money laundering, due to their fraudulent NFT scheme.
According to the release, Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan allegedly carried out a scheme to defraud victims into purchasing digital artwork called the “Evolved Apes” collection of NFTs. The scheme specifically involved pumping up the price of the NFTs and lying to people regarding the development of a video game.
In a surreptitious manner, they transferred the fraudulent proceeds to their personal accounts and then ghosted investors without fulfilling their promises.
“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,” said FBI Assistant Director in Charge James Smith.
Three years ago, the defendants carried out a kind of scam called “rug pull” in which they advertised their NFT project called “Evolved Apes”, collected funds from purchasers, and kept the funds without doing anything about the project.
They sold the NFTs, did not develop the promised videogame and quickly shut down the project’s website. The defendants engaged in laundering misappropriated funds via numerous crypto transactions towards concealing their ill-gotten gains.
“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,” said U.S. Attorney Damian Williams.
Each of the defendants has been charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Hence, they face up to twenty years imprisonment if found guilty.
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