Web3 Watch: SDNY targets NFT rug pull

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The Southern District of New York is at it again with more cryptocurrency-related charges. The US district court, in cooperation with the FBI, unsealed an indictment Thursday against three United Kingdom nationals for an alleged fraudulent NFT scheme. 

Mohamed-Amin Atcha, Mohamed Rilaz Waleedh, and Daood Hassan are charged with conspiracy to commit wire fraud and money laundering in connection with the “Evolved Apes” NFT collection. 

The trio lied to investors in 2021 about developing a related video game — which, investigators say, never came to fruition — in order to “pump up the price of the NTFs.” 

“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,” FBI Assistant Director in Charge James Smith said in a statement Thursday. 

The scheme, which prosecutors described in the indictment as a “rug pull,” allegedly resulted in the defendants making off with more than $2 million. 

“Digital art may be new, but old rules still apply: making false promises for money is illegal,” US attorney Damian Williams said. 

Are domains Web3’s next onramp?

Unstoppable Domains and Blockchain.com will be partnering to launch a new Web3 “.blockchain” domain, the companies said Thursday. The companies hope to register the new domain with the Internet Corporation for Assigned Names and Numbers (ICANN). 

The hope, Unstoppable Domains said on X, is that .blockchain domain owners will be able to capitalize on Web2 functions, such as email, “while retaining all of the existing incredible features of Unstoppable Web3 domains.”

The companies will have a year to prepare their ICANN applications, as the global authority said it will release its new application guidelines next year. 

One interesting stat: 

  • The $KITTY token on SOL, a memecoin inspired by infamous Reddit GameStop trader “Roaring Kitty,” lost more than 60% during the retail trader’s livestream Friday afternoon. GameStop shares also took a tumble of more than 30% before the New York Stock Exchange halted trading. 

In other news:

  • Modular blockchain base layer Avail closed a $43 million Series A this week, bringing its total funding to $75 million. The company plans to grow globally and “address the most critical challenges facing Web3” with the new capital.
  • Alchemy launched its new “Alchemy Rollups” tool this week, which aims to help developers launch their own chains. The product is currently available on waitlist, the company said. 
  • Andrew Tate wants to crash Solana, he told X Friday. Upon further investigation it would appear that he intends to buy and hold a few memecoins in an effort to engagement farm, but only time will tell.

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Web3 Watch: SDNY targets NFT rug pull is written by Casey Wagner for blockworks.co

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