John McAfee facing charges for alleged cryptocurrency ‘pump and dump’ scheme on Twitter

| |

McAfee, 75, and a member of his “cryptocurrency staff,” 40-year-old Jimmy Gale Watson, Jr., allegedly exploited Twitter and “enthusiasm amongst traders within the emergency cryptocurrency market to make tens of millions by means of lies and deception,” US Lawyer Audrey Strauss mentioned in a press release on the indictment, which was unsealed Friday in Manhattan federal courtroom.

FBI Assistant Director William F. Sweeney Jr. mentioned the allegations boil all the way down to “an age-old pump-and-dump scheme.” The DOJ alleges McAfee, Watson and others would purchase cryptocurrencies, hype them to McAfee’s Twitter followers, which numbered about 784,000 on the time, to spice up costs after which promote for a revenue — along with selling cryptocurrency choices with out disclosing they had been allegedly receiving cost to take action.

The 2 males are charged with a number of counts of conspiracy to commit fraud, in addition to a single rely of conspiracy to commit cash laundering. In keeping with the indictment, if convicted of all expenses, every may resist 100 years in jail and monetary penalties.

The DOJ mentioned the Securities and Change Fee and the Commodities Futures Buying and selling Fee have additionally filed civil expenses towards McAfee and Watson in parallel enforcement actions.

McAfee is at the moment detained in Spain on different felony expenses. It was not clear who’s legally representing McAfee or Watson on this case. CNN Enterprise despatched an electronic mail to Janice McAfee, McAfee’s spouse, in an effort to achieve him for remark.

It is not the primary time McAfee — founding father of the eponymous antivirus software program agency, with which he’s not affiliated — has had a run-in with the regulation.

The Friday indictment is simply the most recent episode within the weird saga of McAfee’s life over the previous decade. In 2012, McAfee briefly vanished after fleeing his residence in Belize as a result of native police tried to query him on the demise of his neighbor. (He has denied involvement within the demise and claimed he fled as a result of he feared for his life).
He frolicked in Guatemala, after which moved to Montreal, Canada, the place he labored on a documentary about his life. He ran for President in 2016 as a Libertarian and launched a brand new safety product that he known as “a f—ing recreation changer.”
In October 2020, McAfee was arrested in Spain after being indicted by US prosecutors in a separate case associated to alleged tax evasion. At present, McAfee stays detained in Spain and his extradition to the USA is pending.
John McAfee indicted for tax evasion, arrested in Spain

The indictment filed Friday particulars two schemes McAfee and Watson and different unnamed “McAfee Group members” allegedly carried out from December 2017 to October 2018 that prosecutors say defrauded cryptocurrency traders.

The alleged schemes

The primary is an alleged “pump-and-dump” scheme during which prosecutors declare the group purchased up giant numbers of publicly traded cryptocurrency “altcoins” at low costs earlier than McAfee used his Twitter account to advocate that individuals purchase these cryptocurrencies — with out disclosing that he owned them. After the tweets helped inflate the cryptocurrencies’ market worth, the DOJ alleges McAfee and the staff bought off their positions on the greater costs.

“By way of this scalping scheme, McAfee and different McAfee staff members … collectively earned greater than $2 million in illicit earnings whereas the long-term worth of the advisable altcoins bought by traders declined considerably as of a 12 months after the promotional tweets,” courtroom paperwork state.

Within the second alleged scheme, McAfee and his staff used his Twitter account to advertise preliminary coin choices, with out disclosing that he was being compensated by the ICO issuers for his tweets. The Securities and Change Fee had beforehand warned that securities regulation required disclosing any compensation earned from publicly selling preliminary coin choices on behalf of the issuers.

McAfee and his staff earned greater than $11 million in “undisclosed compensation that they took steps to affirmatively conceal from ICO traders,” the criticism states.

“When partaking in criminal activity, merely discovering new methods to hold out previous tips will not produce totally different outcomes,” the FBI’s Sweeney mentioned about the usage of social media to hold out the alleged schemes.

Previous

Reddit names its first CFO

Apple Watch Series 3 vs SE vs Series 6: Pick the right watch for your wrist

Next

Leave a Comment