Feds Charge UK Citizens in $3 Million ‘Generated Monkeys’ Ethereum NFT Scam

Three U.K. nationals have been charged with masterminding a $3 million fraud related to the “Evolved Apes” NFT collection, the U.S. Department of Justice announced Thursday. Mohammed-Amin Atta, Mohammed Relaz Waleih and Daoud Hassan were charged with money laundering and money laundering in the pump and dump scheme, the officials said.

The DOJ said the charges stemmed from a plan by 2021 to allow NFT collectors to purchase one of “10,000 unique” Ethereum-based NFTs called Evolved Monkeys. The defendants billed 798 ETH at the time, worth about $2.7 million.

“As charged, the defendants committed fraud to inflate the value of digital artwork by falsely promising to develop a video game,” Damian Williams, the United States attorney for the Southern District of New York, said in a statement. “They took investor funding, never raised the game and pocketed the proceeds.”

The DOJ revealed that Acha and Waleedh were heavily promoting Evoved Monkeys, which hired an unnamed social media influencer to champion the project.

A pump and dump scheme is when investors are tricked into buying property based on misleading information. The scammer uses advance interest to increase the value of the property, selling everything and losing it – or “pulling the rug” – leaving unwitting victims with signs of worthlessness.

According to the case documents, Waledh identified himself as Evolved Apes' chief marketing officer when he tried to withdraw funds that were stuck on an unnamed cryptocurrency exchange used by the group. When Walid was allowed access to the money, the DOJ transferred it to a cryptocurrency address controlled by Hassan.

“Digital art may be new, but old rules still apply: Making false promises for money is illegal. As we allege, thousands of people were duped into buying these NFTs by believing these false promises, including here in the Southern District of New York,” Williams said. “NFT fraud is not a game, and those responsible will be held accountable.”

If convicted, the three defendants face a maximum of 20 years in prison.

Carpet sweepers are rampant in the cryptocurrency space. Most recently, a couple of carpet pullers have made headlines, including one in May where a “mother and son” duo staged an embarrassing live stream to pull off a “LIVEMOM” token and walked away with $300,000. This was followed by another scheme where an anonymous creator coined the “hands” mm coin.

The creator said during a live stream on the NoHandsNoRug Twitch channel: “I have no hands, I have no hands, I can't be bothered, don't worry, to reveal his hands before selling the 7 SOL, valued at around $1,000.”

Edited by Ryan Ozawa.