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Antivirus software pioneer McAfee charged by U.S. with cryptocurrency fraud

EconomyMar 05, 2021 07:15PM ET
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© Reuters. John McAfee, co-founder of McAfee Crypto Team and CEO of Luxcore and founder of McAfee Antivirus, speaks at the Malta Blockchain Summit in St Julian's

By Jonathan Stempel and Chris Prentice

NEW YORK/WASHINGTON (Reuters) - John McAfee, the antivirus software pioneer whose former company still bears his name, has been indicted on fraud and money-laundering conspiracy charges stemming from two cryptocurrency schemes, the U.S. Justice Department said on Friday.

Authorities accused McAfee and his bodyguard, Jimmy Gale Watson Jr., of exploiting McAfee's large Twitter following to artificially inflate prices of "altcoins" through a so-called pump-and-dump scheme, and concealing payments McAfee received from startup businesses to promote initial coin offerings.

The Justice Department said McAfee and his accomplices reaped more than $13 million from the schemes. The charges were brought in Manhattan federal court.

The Commodity Futures Trading Commission filed related civil charges concerning the alleged pump-and-dump scheme.

Manhattan U.S. Attorney Audrey Strauss said in a statement: "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 could not immediately be identified. McAfee is being detained in Spain following his arrest there on tax evasion charges announced in October, the Justice Department said.

Watson was arrested on Thursday night in Texas, the department added.

Watson's attorney Arnold Spencer said in a statement: "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 also face civil charges by the U.S. Securities and Exchange Commission, which in October accused McAfee of concealing more than $23.1 million he made from boosting seven cryptocurrency offerings on Twitter.

In the cryptocurrency cases, authorities said McAfee touted assets including Verge, Reddcoin and Dogecoin as part of a "Coin of the Day" or "Coin of the Week" tweet from around December 2017 through February 2018.

Authorities said McAfee held himself up as an expert on cybersecurity and cryptocurrency through his tweets, speeches and his role as a CEO of a publicly traded cryptocurrency company. They also accused him of telling followers he had no stake in the coins, even as he touted how they "will change the world."

Antivirus software pioneer McAfee charged by U.S. with cryptocurrency fraud
 

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Comments (10)
adewale odunaiya
adewale odunaiya Mar 06, 2021 8:18PM ET
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He is a real Fraud! He was with that scam called Mcaffee Magic by Arbitraging.com. He should be properly investigated.
Brent Pye
Brent Pye Mar 06, 2021 9:44AM ET
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Most of you are not very smart. It shows in your comments. McAfee was paid by alt coin creators to use his platform to promote their products. He did not disclose that he was paid and did not submit his earnings for taxes. He also told others to buy the products he was holding. Musk on the other hand is not being paid by Bitcoin or Doge, is disclosing his earnings for taxes, and as far as I know has never told you to buy Bitcoin, Doge or Tesla stock. Am I missing something or are you just uninformed?
Nate Johnson
Nate Johnson Mar 05, 2021 8:00PM ET
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Here's my disclaimer " None of this information is financial advice, nor a recommendation to trade or deal in the company or listed products in any way."
Alun Benjamin
Alun Benjamin Mar 05, 2021 4:58PM ET
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Surely Musk will be suitably chastised by the SEC over his ill-advised pumping of BTC and DOGE? It is the purest definition of 'ramping'. Use you position as a tech industry leader with a loud public voice and millions of eager listeners to spew out baseless garbage in order to enrich yourself. He ought to know the ethics of business by now.
Nate Johnson
Nate Johnson Mar 05, 2021 4:58PM ET
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Couldn't agree more. Don't get me wrong I think Musk is a genius engineer but he's socially inept. And his Twitter account gets him into hot water.
steve rosenberg
steve rosenberg Mar 05, 2021 4:58PM ET
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Musk is no Saint, but he has huge fanbase of young through middle age. He probably could win election today as President. McAfee's a Rebel Gangster Combo.
Andre Viparich
Andre Viparich Mar 05, 2021 2:14PM ET
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Dogecoin to the moon!!!
Matt Kay
Matt Kay Mar 05, 2021 2:14PM ET
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So what? Millionaires are above the law. This doesnt matter
Nate Johnson
Nate Johnson Mar 05, 2021 2:14PM ET
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Billionaires own and make the laws millionaires are above it.
Remko Phone
Remko Phone Mar 05, 2021 2:08PM ET
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Wow, Elon Musk will be next for his 'promotion' of bitcoin and dogecoin
Nate Johnson
Nate Johnson Mar 05, 2021 2:08PM ET
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Yep. And a few others too. Most companies don't publicly announce what they are buying yet for some reason cryptocurrencies are the exception. Sounds like a classic case of a pump and dump scheme to me. They should all be charged for this behavior. Because of them it's encouraged people to invest in something they don't understand the risks of.
mehdi hamel
mehdi hamel Mar 05, 2021 2:07PM ET
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Elon musk on dogecoin and bitcoin did the same.
Felipe Daniel
Felipe Daniel Mar 05, 2021 1:30PM ET
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Go after the US Federal Reserve largest racketeering to date
Charles ODonnell
Charles ODonnell Mar 05, 2021 12:53PM ET
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Not too surprising is it...easy to fleece money in cyber currencies fro the FOMO club.
 
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