Authorities accused McAfee and his bodyguard, Jimmy Gale Watson Jr., of exploiting McAfee’s massive Twitter following to artificially inflate costs of “altcoins” by means of a so-called pump-and-dump scheme, and concealing funds McAfee obtained from startup companies to advertise preliminary coin choices.
The Justice Department mentioned McAfee and his accomplices reaped greater than $13 million from the schemes. The prices have been introduced in Manhattan federal court.
The Commodity Futures Trading Commission filed associated civil prices regarding the alleged pump-and-dump scheme.
Manhattan U.S. Attorney Audrey Strauss mentioned in a press release: “As alleged, 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.”
Lawyers for McAfee couldn’t instantly be recognized. McAfee is being detained in Spain following his arrest there on tax evasion prices introduced in October, the Justice Department mentioned.
Watson was arrested on Thursday night time in Texas, the division added.
Watson’s legal professional Arnold Spencer mentioned in a press release: “Jimmy Watson is a decorated veteran and former Navy Seal. He fought for other people’s rights and liberties, and he is entitled to and looks forward to his day in court to exercise some of those very rights.”
Both additionally face civil prices by the U.S. Securities and Exchange Commission, which in October accused McAfee of concealing greater than $23.1 million he made out of boosting seven cryptocurrency choices on Twitter.
In the cryptocurrency circumstances, authorities mentioned McAfee touted belongings together with Verge, Reddcoin and Dogecoin as a part of a “Coin of the Day” or “Coin of the Week” tweet from round December 2017 by means of February 2018.
Authorities mentioned McAfee held himself up as an skilled on cybersecurity and cryptocurrency by means of his tweets, speeches and his position as a CEO of a publicly traded cryptocurrency firm. They additionally accused him of telling followers he had no stake within the cash, at the same time as he touted how they “will change the world.”