John McAfee indicted on crypto fraud charges

Rick Steves

This is only the first case brought by the CFTC for a manipulative scheme involving digital assets

The Commodity Futures Trading Commission has filed a complaint in the State of New York against John McAfee and his former employee Jimmy Gale Watson for “engaging in a manipulative and deceptive digital asset “pump-and-dump” scheme”.

McAfee and Watson allegedly accumulated positions in digital assets and promoted the digital assets through social media as valuable long-term investments only to then sell the assets after their prices rose sharply following McAfee’s deceptive endorsements.

The pump-and-dump scheme involved verge (XVG), dogecoin (DOGE), and reddcoin (RDD) and resulted in profits in excess of $2 million, according to the CFTC.

The CFTC announced this is only the first case brought by the regulator for a manipulative scheme involving digital assets. There may be more to come in the near future.

Acting Director of Enforcement Vincent McGonagle, said: “Manipulative and fraudulent schemes, like that alleged in this case, undermine the integrity and development of digital assets and cheat innocent people out of their hard-earned money. Financial innovation is constantly breaking new ground, and the CFTC’s enforcement efforts must keep up. We will always act to hold fraudsters and manipulators accountable for misconduct.”

McAfee and Watson were indicted on charges of conspiracy to commit commodities and securities fraud, wire fraud, wire fraud conspiracy, conspiracy to commit securities touting fraud, and money laundering. Both individuals are also defendants in a civil enforcement action brought by the Securities and Exchange Commission.

The SEC’s complaint filed a year ago alleges that McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (“USD”) in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers.

“The ICO at issue involved the offer and sale of digital asset securities and McAfee’s recommendations were materially false and misleading for several reasons.

“McAfee did not disclose that he was being paid to promote the ICOs by the issuers (the companies selling the securities in the ICOs). Promoting a security without disclosing that you are being paid to do so is unlawful “touting” and violates the federal securities laws.

“The ICOs McAfee touted raised at least approximately $41 million and McAfee made approximately $23.2 million in secret compensation for his touts. When directly asked if he was being paid for these promotions, McAfee lied to investors by falsely denying he was being paid by the issuers”, the complaint stated.

Read this next

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

<