The United States Attorney's Office for the Southern District of New York made a significant announcement today, unveiling charges against three individuals linked to a notorious non-fungible token (NFT) rug pull scheme from 2021 known as Evolved Apes. Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan face charges of wire fraud and money laundering, as detailed in a release from the SDNY's office.

Evolved Apes initially enticed investors with the promise of a revolutionary video game, offering a collection of 10,000 unique NFTs. However, this promise proved hollow as the anonymous developer, known only as Evil Ape, disappeared just a week after the project's launch. In a devastating blow to investors, Evil Ape vanished with a staggering 798 ether, valued at $3 million at the time of the incident and approximately $2.7 million at present.

U.S. Attorney Damian Williams minced no words in condemning the actions of the accused, stating, "The defendants ran a scam to drive up the price of digital artwork through false promises about developing a video game." He emphasized, "They allegedly took investor funds, never developed the game, and pocketed the proceeds." Williams reaffirmed the application of existing legal standards to the digital realm, asserting that "making false promises for money is illegal," regardless of the medium.

The nefarious tactic employed in this scheme is commonly known in crypto circles as a "rug pull," a form of exit scam where developers solicit investments under false pretenses, only to abruptly abandon the project and abscond with the funds. According to De.Fi's Rekt database, rug pulls have resulted in losses exceeding $14.5 billion since 2011, underscoring the prevalence and severity of such fraudulent activities.

Among the notable instances of rug pulls, the largest recorded to date involved South African digital assets investment fund Africrypt, which vanished with a staggering 69,000 bitcoins in 2021. This haul was valued at nearly $4.8 billion, representing a devastating blow to investors and highlighting the risks inherent in the digital asset landscape.

The charges brought forth by U.S. authorities underscore the ongoing efforts to combat fraudulent activities within the burgeoning NFT space. As regulators intensify their scrutiny and enforcement actions, investors are urged to exercise caution and conduct thorough due diligence before participating in any digital asset offerings.