Web3 Watch: SDNY targets NFT rug pull

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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