Remember when John McAfee claimed Bitfi’s wallet is unhackable and then it got hacked twice? Now, anti-virus software creator John McAfee has been charged with fraud and money-laundering related to two cryptocurrency schemes, the US Justice Department stated on Friday.
According to the authorities, they used the ‘pump-and-dump scheme’ on Twitter to exploit McAfee’s large following and concealed payments that McAfee received from start-up businesses to promote initial coin offerings.
It is important to understand how the pump-and-dump scheme works; it boosts the price of a stock through recommendations based on false, misleading, or greatly exaggerated statements.
The perpetrators of this scheme are usually already well known in the company and have an established position in the company’s stock. This practice is illegal based on securities law and it can also lead to heavy fines.
So what happened with the schemes exactly?
McAfee, Watson, and other team members first bought huge quantities of publicly-traded cryptocurrency ‘altcoins’ at inexperienced market prices with the intention of publicly endorsing them through his widely followed Twitter account.
The SEC allegations:
My team evaluated every promotion based on management, business plans and potential. No one could have foreseen the altcoin market crash.
We were paid in the same coins that crashed. The SEC allegations are overblown.
— John McAfee (@officialmcafee) March 6, 2021
Then they proceeded to publish false and misleading endorsement tweets recommending those altcoins to members of the investing public in order to artificially inflate their mar ..
Support the originator by clicking the read the rest link below.
