Cybersecurity pioneer John McAfee has been charged with security fraud and money laundering conspiracy in two cryptocurrency schemes. The US Justice Department accused the antivirus founder and his executive advisor and bodyguard Jimmy Gale Watson Jr of being involved in the so-called pump-and-dump scheme. The Justice Department said that the duo exploited a huge number of followers of McAfee on Twitter to inflate prices of cryptocurrencies like Dogecoin and Reddcoin. They would first urge the followers to invest their money in cryptocurrencies and when there is a rise in price, they will sell their own holdings. The federal prosecutor said that they made over USD 12 million through this scheme.
Manhattan US Attorney Audrey Strauss said that the duo made millions by exploiting the social media platform and enthusiasm among investors. They run the scheme between 2017 to October 2018 when the cryptocurrency market was emerging. “They used the Twitter account to share messages to thousands of followers. They spread false and misleading information while hiding their interest in cryptocurrencies,” the Attorney said. McAfee has a verified Twitter account and currently, it has over 1 million followers. The indictment says that McAfee recommended a “Coin of the Week” or a “Coin of the Day.” While doing so, it claimed to have a stake in these altcoins.
But the reality was that he used to buy a large number of these cryptocurrencies before making such recommendations. It would sell them as soon as the price is driven up by its followers. “They made millions through deception and lies.’ The Justice Department said that McAfee has been detained in Spain and Watson arrested in Texas. Watson’s attorney Arnold Spencer said that his client is a former Navy Seal and looks forward to exercising those rights in court. “Watson fought for rights and liberties of other people.” The U.S. Securities and Exchange Commission has also framed charges against both of them. It has accused McAfee of concealing information about USD 23 million that he collected by boosting several cryptocurrency offerings on the microblogging site.
