The United States Securities and Exchange Commission (SEC) has sued the popular septuagenarian crypto big gun, John McAfee for his past activity related to the promotion of initial coin offerings (ICOs) on social media.
The complaint reads as follows:
“From at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (“USD”) in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers. The ICOs at issue involved the offer and sale of digital asset securities and McAfee’s recommendations were materially false and misleading for several reasons.”
John McAfee’s Accusations
John McAfee was specifically arrested for not disclosing “that he was being paid to promote the ICOs by the issuers,” that he “falsely claimed to be an investor and/or a technical advisor when he recommended several ICOs,” that he “encouraged investors to purchase the securities sold in certain of the ICOs without disclosing that he was simultaneously trying to sell his own holdings and had paid another third-party promoter to tout the securities” and that he “engaged in a practice known as “scalping” as to at least one digital asset security, by accumulating large amounts of the digital asset security and touting it on Twitter without disclosing his intent to sell it.”
John McAfee Arrested In Spain for Tax Evasion
According to the Department of Justice, John McAfee has been charged for evading tax. He was arrested in Spain where he is expected to be extradited.
The Department of Justice (DOJ) stated:
“According to the indictment, John McAfee earned millions in income from promoting cryptocurrencies, consulting work, speaking engagements, and selling the rights to his life story for a documentary. From 2014 to 2018, McAfee allegedly failed to file tax returns, despite receiving considerable income from these sources. The indictment does not allege that during these years McAfee received any income or had any connection with the anti-virus company bearing his name.”
The statement reads further that “If convicted, McAfee faces a maximum sentence of five years in prison on each count of tax evasion and a maximum sentence of one year in prison on each count of willful failure to file a tax return. McAfee also faces a period of supervised release, restitution, and monetary penalties.”
McAfee’s co-defendant, Jimmy Gale Watson, Jr., was described as McAfee’s bodyguard. Watson is accused of assisting McAfee, naming the touting, and scalping activities in particular.
“McAfee was paid Bitcoin (BTC) and ether (ETH) worth more than $11.6 million, plus an additional $11.5 million worth of promoted tokens, as undisclosed compensation for his promotions of seven ICOs. McAfee paid Watson at least $316,000 for his role,” the complaint stated.
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