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John McAfee faces up to 20 years in prison for alleged cryptocurrency fraud

John McAfee, pioneer and founder of the antivirus software company of the same name, has been charged with fraud and conspiracy to commit money laundering. These crimes would have been derived from two alleged cryptocurrency schemes, the federal authorities of the United States reported this Friday, March 5.

In a press release that was freely circulated by the Prosecutor’s Office for the Southern District of New York, McAfee and his partner Jimmy Gale Watson are alleged to have used a large following of McAfee’s Twitter account to inflate the prices of various cryptocurrencies through a “ pump and dump scheme. ”. Additionally, payments McAfee received from startups to promote their Initial Coin Offerings (ICOs) were concealed.

In this document, the US Department of Justice It pointed to both defendants accepting more than USD 13 million for these schemes. The United States Commodity and Futures Trading Commission (CFTC) filed civil charges for the alleged pump and dump scheme.

McAfee and Watson They also face separate civil charges by the U.S. Securities and Exchange Commission (SEC), which in October accused McAfee of concealing $ 23.1 million that he won by powering seven cryptocurrency offerings on Twitter.

In summary, McAfee and Watson were indicted on seven counts . One count of conspiracy to commit fraud with commodities and securities; one count of conspiracy to commit promotional-related securities fraud; as well as two counts of conspiracy to commit wire fraud. Each of these crimes carries penalties that could range from 5 to 20 years in prison , in addition to possible financial penalties. Watson was arrested that day in Texas.

It should be clarified that the expression pump and dump is defined as a market manipulation scheme by an investor or group of investors who try to increase the price of an asset they own and then sell it en masse. They do this through recommendations based on false, misleading, or grossly exaggerated statements. This scheme is illegal in many countries.

A second fraud scheme

The indictment also includes a second fraud scheme for which McAfee and Watson linked with an initial offering of currency .

According to the indictment, under this scheme emerging companies issued and sold digital tokens, which was not disclosed to investors. They also concealed from them that the ICO issuers were compensating McAfee and his team for their promotional tweets with a substantial portion of the funds raised from ICO investors.

In this regard, the United States Securities and Exchange Commission (SEC) warned that people promoting ICOs should disclose any compensation they receive for endorsing the digital tokens. As McAfee and Watson well knew,” reads the press release.

The earnings of McAfee and its partners from payments Undisclosed ICO commissions reached $ 11 million that would have been hidden from investors, the document reads.

McAfee responses to the SEC allegations

On his Twitter account, John McAfee points out that the SEC’s accusations are exaggerated. “My team evaluated each promotion based on management, business plans and potential. No one could have foreseen the crash of the altcoin market. They paid us with the same coins that crashed. ”

McAfee opened a thread to defend himself against this accusation against him. He said his belief in the coins he promoted is exemplified by the Docademic, the coin he promoted the most. Even when it crashed, he kept every coin assigned to him, never sold a single coin, he claims.

He points out that a large part of the new accusations from the feds refer to his “currency of the day ”. For a few days in 2017, he notes that he chose coins that he believed had value. One of them was Dogecoin (Doge), now promoted years later by Elon Musk (owner of Tesla). The coin has risen more than 1,000% since you chose it. “It’s not pump and dump,” he says.

John McAfee is still detained in Spain for tax evasion

delito twitter estancia prisión
Currently John McAfee is detained in Spain. Source: @officialmcafee / Twitter.

As reported by CryptoNews in October 2020, McAfee he was detained at the Prat airport, in Barcelona, ​​Spain. According to the accusations made at the time by the United States Department of Justice, McAfee avoided declaring millionaire income from cryptocurrency promotions, consulting work, the rights to his life story in a documentary, and the possession of property as well as assets. to evade taxes.

The statement from the Department of Justice indicates that between 2014 and 2018 McAfee did not file tax returns despite receiving considerable income. According to the prosecution McAfee had allegedly received payment through bank accounts and cryptocurrency payments on behalf of other people.

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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