In the evening of December 20, 2017, controversial cybersecurity pioneer John McAfee tweeted that he would tackle something of an educational flash. “I start tomorrow every day on a unique altcoin,” McAfee wrote. ‘Most of the 2,000 coins are rubbish bins or scams. I read every white paper. The couple I’m connected to, I’ll tell you. The rest I have no position in. This is the last bit that caught the attention of the Department of Justice.
On Friday, the U.S. Attorney’s Office in the Southern District of New York charged McAfee and Executive Assistant Jimmy Watson on several charges that include two alleged cryptocurrency schemes. (McAfee was charged earlier in October with separate tax evasion charges.) According to court documents, McAfee and his associates raised a total of $ 13 million between the two attempts, both of which relied on using McAfee’s popular Twitter account to niche cryptocurrencies. promote or promote currencies. initial coin offers without declaring that he would make a profit, either through investment profits or promotional fees.
“As alleged, McAfee and Watson have exploited a social media platform and enthusiasm among investors in the emerging cryptocurrency market to earn millions through lies and deception,” Manhattan attorney Audrey Strauss said in a press release. “The defendants allegedly used McAfee’s Twitter account to post messages to hundreds of thousands of his Twitter followers that provoked various cryptocurrencies with false and misleading statements to hide their true, self-interest motives.”
Pump you up
The alto conversations that McAfee promoted were one alleged leg of the deception. In mid-December 2017, he allegedly instructed an employee to buy approximately $ 5,000 worth of tokens in XVG, also known as Verge. On the same day on Twitter, McAfee described XVG – along with more established tokens such as Monero and Zcash – as a coin that ‘can not lose’. Two days later, when a Twitter user suggested that McAfee “pumped” XVG and artificially inflated its value to sell high, McAfee responded with indignation. “I have no XVG,” he said wrote. “I live [sic] how your level people can not distinguish between someone who speaks shamelessly, because it is true, and someone with side effects. You know absolutely nothing about me if you believe I have time to dump rubbish. ‘
XVR rose 500 percent in the four days after McAfee’s initial tweet. McAfee, prosecutors say, sold near the top and made a neat profit of $ 30,000.
It seems to have inspired the success that McAfee would call his “Coin of the Week” series. On the same day that he announced his journey to “unique altcoins” on Twitter, McAfee allegedly instructed an employee to place $ 100,000 bitcoin in Electroneum tokens. On December 21, 2017, he tweeted a glowing, summary report on ETN, including the claim that he “has more than one DM that Electroneum calls the holy grail of cryptocurrency.” (This is quite a contrast to what McAfee tweeted just one week earlier December 15: “I personally do not find anything about Electroneum that I would like to talk about. Not that it’s bad, just not special to me. “) Again assert that he owned nothing.
Electoneum jumped 40 percent that day. Prosecutors say McAfee’s associate paid out a profit.
In court documents, it is alleged that the basic scheme, which was played on 28 January the following year, is foamed, rinsed and repeated. McAfee would instruct his associate to buy hundreds of thousands or even millions of tokens in the altcoin less than ten days before he offered it. McAfee will glorify the virtues of BURST, DGB, RDD, HMQ, TRX, FCT, DOGE, XLM, SYS and RCN. His co-worker, prosecutors say, would soon close the position to take advantage of the usual bump. In all, they allegedly extorted $ 2 million from the pump-and-shower scheme, including hundreds of thousands of Dogecoin alone.