Mar 5, 2021 - Technology

John McAfee indicted for alleged cryptocurrency pump and dump scheme

John McAfee

Photo: Adalberto RoqueAFP via Getty Images

John McAfee, the eccentric founder of the cybersecurity company McAfee, was indicted Friday on charges related to securities fraud and money laundering, according to the Justice Department.

Details: McAfee and his adviser Jimmy Watson have been accused by federal prosecutors in New York of using McAfee's Twitter account to promote cryptocurrencies to his 1 million+ followers in order to artificially inflate their market price.

What they're saying: “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," Manhattan U.S. Attorney Audrey Strauss said 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."
  • "McAfee, Watson, and other members of McAfee’s cryptocurrency team allegedly raked in more than $13 million from investors they victimized with their fraudulent schemes.  Investors should be wary of social media endorsements of investment opportunities."

What to watch: McAfee and Watson face a maximum potential sentence of five years in prison if convicted.

The big picture: McAfee has run into serious legal trouble in the past — most recently in October, when he was arrested in Spain and charged by the SEC for fraudulently touting "initial coin offerings." He also fled his home in Belize in 2012 and became a fugitive in a murder case.

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