American News Mar 5, 2021 10:40 PM EST

John McAfee indicted on cryptocurrency fraud charges

New York prosecutors unveiled federal charges against both McAfee and a business partner in relation to inflating the value of crypto.

John McAfee indicted on cryptocurrency fraud charges
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New York prosecutors unveiled federal charges against both John McAfee and a business partner in relation to inflating the value of crypto.

They list the 75-year-old McAfee alongside one Jimmy Gale Watson Jr. in the press release. Officials cite the 40-year-old executive advisor to McAfee’s “so-called cryptocurrency team” as a co-conspirator to commit “commodities and securities fraud, conspiracy to commit securities and touting fraud, wire fraud conspiracy and substantive wire fraud, and money laundering conspiracy offenses.”

U.S. authorities assert the crime was committed by both individuals through McAfee’s Twitter account, using it  to peddle various digital token alternatives to Bitcoin. In addition, on a separate charge, the duo didn’t disclose their personal stakes they had with the ICOs in question.

From the release:

  • The first offense was a “pump and dump” scheme where McAfee, Watson, and “other McAfee Team members” bought large quantities of cryptocurrency altcoins with knowledge in advance that McAfee intended to endorse them. In doing so, it “pumped” up the value of the coins in question. After that, those accused all sold their stake in these digital commodities for a profit totaling reportedly more than $2 million.
  • The second charge relates to McAfee’s (and others) involvement in “initial coin offerings” (ICOs) events. The people behind these ICOs had privately compensated Mr. McAfee without him publicly disclosing as such for his promotional efforts. "From approximately on or about December 20, 2017 through on or about February 10, 2018, MCAFEE, WATSON, and other McAfee Team members collectively earned more than $11 million in undisclosed compensation that they took steps to affirmatively hide from ICO investors. In each instance, MCAFEE and WATSON failed to disclose to ICO investors that the ICO Issuers were paying the McAfee Team a substantial portion of the funds raised from ICO investors for their touting efforts, despite knowing that they were required to disclose such compensation under federal securities laws."

Separately the press release points out that between December 2017 and October 2018 that McAfee and Watson led another “McAfee team member” to engage in money laundering in relation to these schemes.

Federal officials arrested Jimmy Watson last night while McAfee has been jailed in Spain since October 2020 on tax-related charges. Two months after McAfee was reportedly arrested for wearing a thong in place of a face mask.

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