The anti-virus software pioneer John McAfee has hit out after being charged with fraud and money laundering crimes in the United States.
McAfee, along with Jimmy Watson, executive advisor of his cryptocurrency team, have been accused of offences relating to the fraudulent promotion of cryptocurrency, the Justice Department said.
The pair are accused of carrying out a “a pump and dump” scheme, whereby they bought publicly traded altcoins at a low price before using McAfee’s Twitter account to promote the coins using “false and misleading” statements”. They would then sell the coins at the resulting higher price to make a profit. This allegedly netted them $2m in illicit profits between December 2017 and January 2018.
It is also alleged that McAfee and Watson used the official McAfee Twitter account to publicly tout initial coin offerings (ICO)– in which start-up businesses issued and sold digital tokens to investors- while concealing the fact the ICO issues had compensated McAfee and his team for the promotional tweets. It is alleged McAfee earned $11m in such undisclosed compensation between December 2017 and February 2018.
McAfee, who is currently detained in Spain on separate tax charges, denies any wrongdoing on cryptocurrencies and took to Twitter over the weekend to describe the allegations as “overblown”.
He said: “My team evaluated every promotion based on management, business plans and potential.”
“No one could have foreseen the altcoin market crash. We were paid in the same coins that crashed.”
“My belief in the coins I promoted is exemplified by Docademic – the coin I promoted the most,” he argued. “Even as it crashed I held every single coin allocated to me. I never sold a single coin. I believed in the company to the very end.”
McAfee and Watson are charged with conspiracy 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 cryptocurrencies qualifying under federal law as commodities or securities.
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