In the evening on December 20, 2017, the controversial cybersecurity pioneer, John McAfee, wrote on Twitter that he would start something like an educational flash. “Starting tomorrow, I’ll be talking about a unique altcoin every day,” McAfee wrote. “Most of the 2,000 coins are rubbish or scams. I read every white paper. Some to which I am connected I will tell you. Otherwise I have no position. “The last fragment that attracted 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 with multiple charges involving two alleged cryptocurrency schemes. (McAfee was previously indicted in October on separate charges of tax evasion.) According to court documents, McAfee and its associates earned a total of $ 13 million between the two efforts, both based on the use of the popular Twitter account. McAfee to push niche cryptocurrencies or promote initial coin offerings without revealing that it has made a profit, either through investment gains or promotional commissions.
“McAfee and Watson are believed to have exploited a widely used social platform and enthusiasm among emerging cryptocurrency investors to earn millions through lies and deception,” said Manhattan’s American lawyer Audrey Strauss. a press release. “The defendants allegedly used McAfee’s Twitter account to post messages to hundreds of thousands of his Twitter followers, supporting various cryptocurrencies through false and misleading statements, to hide their true, self-interested motives.”
Pump You Up
The altcoin discussions that McAfee promoted were an alleged stage in this deception. In mid-December 2017, he allegedly directed an associate to buy tokens worth about $ 5,000 in XVG, also known as Verge. On the same day, on Twitter, McAfee described XVG – along with more established chips such as Monero and Zcash – as a currency that “can’t lose”. Two days later, when a Twitter user suggested that McAfee had “pumped” XVG, artificially inflating its value to sell high, McAfee responded with indignation. “I don’t own XVG,” he said wrote. “I live [sic] the way you, superficial people, cannot distinguish between someone who shamelessly says his mind – because it is true – and someone with a later motive. You know absolutely nothing about me if you think I have time to waste wasting garbage. ”
XVR rose 500% in the four days following McAfee’s initial tweet. McAfee, prosecutors say, sold close to the top, making an orderly profit of $ 30,000.
The success seems to have inspired what McAfee would call its “Currency of the Week” series. The same day he announced his trip to “unique altcoins” on Twitter, McAfee allegedly instructed an associate to put $ 100,000 bitcoin in Electroneum chips. On December 21, 2017, he posted on Twitter a brilliant, bulletproof report on ETN, including a statement that it had “more than one DM calling Electroneum the holy grail of cryptocurrencies.” (It’s quite a contrast to what McAfee posted on Twitter just a week earlier December 15th: “I personally can’t find anything about Electroneum that I would like to talk about. Not that it’s bad, it’s just not special to me. ”) He again alleged that he did not own any.
Electoneum jumped 40% that day. McAfee’s associate made a profit, prosecutors say.
The court documents claim a foaming, rinsing, repetition of the basic scheme carried out until January 28 of the following year. McAfee would train its partner to buy “hundreds of thousands or even millions of chips” in the altcoin presented this week less than 10 days before presenting it. McAfee would extol the virtues of BURST, DGB, RDD, HMQ, TRX, FCT, DOGE, XLM, SYS and RCN. His associate, prosecutors say, would close the position shortly afterwards to take advantage of the usual swelling. In total, they allegedly pocketed $ 2 million from the pumping and unloading scheme, including hundreds of thousands from Dogecoin alone.