SEC Sues John McAfee for Fraudulently Promoting ICOs
- The US Securities and Exchange Commission (SEC) has filed fraud charges against the popular cryptocurrency proponent and well-known tech entrepreneur, John McAfee.
- According to the documents, McAfee has taken advantage of his massive Twitter following and has “leveraged his fame to make more than $23.1million in undisclosed compensation by recommending at least seven initial coin offerings (ICOs).”
- The charges outline that the entrepreneur has failed to disclose that he was being paid to promote said ICOs by their issuers.
- This, according to the SEC, constitutes an “unlawful touting and violates the federal securities laws.”
- The charges further allegate that McAfee has fraudulently claimed that he is an investor or a technical advisor for the ICOs in question, thus “creating the impression that he had vetted these companies … and that he was willing to invest his own money in the ventures.” However, the truth, according to the securities watchdog, was that he had received a payment for the tweets, which were disguised as impartial investment advice.
- Another allegation is that McAfee had been exposed by a “blogger,” and this resulted in him holding virtually worthless cryptocurrency. He then used his Twitter profile to increase their value without disclosing an intent to sell.
- What’s described as “scalping” by the SEC is a process that “allows promoters to sell their securities holdings quickly and profitable through market interest that they deceptively generate, and violates the federal securities laws.”
- For his activities, McAfee has allegedly received $11.6 million in BTC and ETH and an additional $11.5 million worth of promoted tokens.
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