Case filed against McAfee by SEC over ICO Promotion
A case filed on Monday, 5th Oct 2020, by SEC against John McAfee over paid Initial Coin Offerings (ICOs) promotions. Basically promoting ICOs without disclosing that he was being paid to promote is a violation under the U.S. securities law.
As per the report, “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.”
According to Federal Securities Law, “Promoting a security without disclosing that you are being paid to do so is unlawful “touting” and violates the federal securities laws.”
John McAfee made at approximately $23.2 million in secret compensation with the ICOs promotions. However, the ICOs that have been promoted by McAfee raised approximately $41 million as per the case filed.
“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.”
Watson was McAfee bodyguard who assisted him in promoting and scalping schemes. Also, he was responsible for negotiation with the ICOs issuers.
“McAfee 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.”
As per the recent report by The Guardian, John McAfee has been arrested in Spain over tax evading and failing to report millions earned by promoting cryptocurrencies etc.
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