New York Prosecutors Charge British Men with Evolved Apes NFT Fraud

New York Prosecutors Charge British Men with Evolved Apes NFT Fraud

The Southern District of New York U.S. Attorney’s Office has charged three British men in connection with an alleged “rug pull” scheme involving the “Evolved Apes” NFT collection. The defendants have been charged with wire fraud and money laundering. The defendants allegedly defrauded investors by selling non-fungible tokens while falsely promising to develop a video game. The complaint alleges that the defendants created the Evolved Apes NFT collection in April 2022 and sold the NFTs to investors for approximately $2.7 million. The defendants allegedly promised investors that they would use the proceeds from the sale of the NFTs to develop a video game. However, the defendants allegedly abandoned the video game project and transferred the proceeds from the sale of the NFTs to their own personal accounts. The defendants were arrested in the United Kingdom on June 28, 2023, and extradited to the United States on July 12, 2023. They were arraigned on July 13, 2023, and pleaded not guilty to the charges. The charges against the defendants are part of a broader crackdown on NFT fraud by the U.S. Department of Justice. In March 2023, the DOJ created a National Cryptocurrency Enforcement Team to investigate and prosecute cryptocurrency-related crimes, including NFT fraud. The DOJ’s crackdown on NFT fraud is a sign that the government is taking this type of crime seriously. Investors should be aware of the risks associated with investing in NFTs and should only invest in NFTs that are issued by reputable companies.