The Securities and Exchange Commission (“SEC”) recently charged infamous celebrity businessman John McAfee with the fraudulent promotion of cryptocurrencies in several initial coin offerings. The complaint alleges that McAfee was paid over $23 million to make false and misleading statements that pumped the value of “virtually worthless” cryptocurrencies and, in so doing, McAfee pretended to be “impartial and independent.” McAfee’s bodyguard allegedly assisted McAfee by “negotiating the promotion deals with the ICO issuers, helping McAfee cash out the digital asset payments for the promotions, and, for one of the ICOs McAfee was promoting, having his then-spouse tweet interest in the ICO.” The SEC has also alleged that McAfee engaged in a pump and dump scheme by “secretly accumulating a large position” of these cryptocurrencies, touting them on Twitter while intending to sell them, and then “selling his positions as the price rose.” The SEC now seeks civil penalties and an order prohibiting McAfee from serving as an officer or director of any publicly traded corporation. The Department of Justice has brought parallel criminal charges against McAfee for tax evasion related to this alleged misconduct.
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About Dillon Hagius
Dillon Hagius's practice is focused on securities litigation. Dillon is an associate in the firm's New York office.