John McAfee has been indicted by the U.S. Securities and Exchange Commission in Spain on the charges of tax evasion and illicit participation to promote ICOs in an undisclosed manner.
At present, McAfee is awaiting for the extradition to U.S.A, according to Department of Justice.
Reportedly, “by virtue of the foregoing conduct,” a lawsuit filed by the U.S. Securities and Exchange Commission (Plaintiff) in the United States District Court Southern District of New York on Oct 5, 2020, collectively against defendants- John David McAfee (“McAfee”) and Jimmy Gale Watson, Jr. (“Watson”).
As per the charges, John McAfee was involved in the promotion of seven ICOs (initial coin offering) from Nov 2017 through Feb 2018 in exchange for payments in several cryptocurrencies, including Bitcoin (BTC) and Eth.
For the campaign, McAfee influenced his millions of Twitter followers and falsely trapped them to invest in the securities during ICO promotions which got him more than $23.1 million (“USD”) and the issuers (company selling the ICOs) raised approx. $41 million.
For the publicity, McAfee claimed to be an investor and/or a technical advisor to the ICO projects and claimed that he has vetted these companies.
The filing reads, “McAfee falsely claimed to be an investor and/or a technical advisor when he recommended several ICOs, creating the impression that he had vetted these companies, that they were benefitting from his technical expertise, and that he was willing to invest his own money in the ventures. In reality, McAfee’s tweets were paid promotions disguised as impartial investment advice.”
Allegedly, McAfee did not disclose his compensation share to the investors while promoting the ICOs that the businessman received from the ICO issuers. Meaning, McAfee did not disclose that he was being paid to promote the ICOs by the issuers (the companies selling the securities in the ICOs) which is according to the U.S. SEC is unlawful and comes under the violation of federal securities laws.
“Promoting security without disclosing that you are being paid to do so is unlawful “touting” and violates the federal securities laws.”
Also, when the scam got revealed, McAfee was found to be involved in the scalping process with the help of the third-party promoter to cash out his “large number of virtually worthless securities from the ICOs he had previously touted.”
The SEC also filed charges against Watson, McAfee’s, bodyguard who played a major role in espousing most of the unlawful activities performed by McAfee, including touting and scalping schemes.
“McAfee paid Watson at least $316,000 for his role”… “Watson negotiated the deals with ICO issuers seeking promotions, helped McAfee monetize the proceeds of his promotions, and directed his then-wife to tweet fake interest in an ICO that McAfee was promoting at the behest of the issuer.”
In the past, there were many ICO projects caught under the scrutiny of the U.S. SEC which tried to swindle naïve investors while using the fame of the celebrities. One among them is the infamous initial Coin Offering, Centra Tech wherein, the three co-founders: Sohrab Sharma, Robert Farkas, and Raymond Trapani, took advantage of the fan base of boxer Floyd Mayweather and musician DJ Khaled, to con the investors and tried to offer the tricked debit card “Centra Card” which claimed to convert the cryptocurrencies into fiat currencies.