John McAfee charged with securities fraud for ‘pump and dump’ cryptocurrency scheme

John McAfee has been charged with securities fraud over a “pump and dump” cryptocurrency scheme. Federal prosecutors unsealed a case against McAfee and his executive advisor and bodyguard Jimmy Gale Watson Jr., claiming the pair earned nearly $2 million by urging Twitter followers to invest in cryptocurrencies like Reddcoin and Dogecoin, then selling off their own holdings as the price rose.

“McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” said US Attorney Audrey Strauss in a statement. “The defendants allegedly used McAfee’s Twitter account to publish messages to hundreds of thousands of his Twitter followers touting various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives.”

The pair allegedly ran their scheme between December 2017 to October 2018. McAfee used his verified Twitter account, which currently has around 1 million followers, to recommend a “Coin of the Day” or “Coin of the Week.” The indictment says McAfee claimed to have no stake in these altcoins; in reality, McAfee would allegedly buy large quantities beforehand using bitcoin, then offload them again after his followers had driven up the price.

McAfee and Watson are facing seven charges, each count carrying between five and 20 years in prison. The criminal charges include wire fraud, conspiracy to commit commodities and securities fraud, and conspiracy to commit money laundering.

McAfee — known for founding the eponymous antivirus company — was already arrested last year on separate tax evasion charges. The Securities and Exchange Commission sued him in October for fraudulently promoting initial coin offerings or ICOs. And in 2019, a court ordered him to pay $25 million for allegedly ordering the 2012 killing of his neighbor in Belize. (McAfee has denied involvement and refused to pay the funds.) These charges add yet another layer to his alleged crimes.

Article credit: https://www.theverge.com/2021/3/5/22315494/john-mcafee-fraud-securities-scheme-charges-cryptocurrency