The federal prosecutors have accused John McAfee of indulging in crypto fraud of ‘pump and dump’ to make millions of dollars.
John McAfee, the founder of ‘Antivirus’ software company, made headlines on Friday with his indictment in crypto fraud. McAfee with his cryptocurrency team advisor, Jimmy Watson, allegedly made some altcoins’ prices inflate with the untrue and misleading endorsement of the currencies.
McAfee has a huge online persona. Every user of a personal computer has seen McAfee’s name pop-up in the corner of their desktop’s screen at some point. McAfee created the McAfee Associates company in 1987 and retired from it in 1994. However, the company has remained a leader in the cybersecurity arena for a long time now.
Also Read: 7 Common Bitcoin Scams and How to Avoid Them
Noob investors often watch out for the opinions of influential people. Henceforth, John McAfee is the man whose words matter in the world of tech.
According to the federal prosecutor, McAfee purchased a large number of cheap crypto coins and endorsed them online. Many crypto investors, following his promotional tweets, started buying the same altcoins. Resultantly, the market price of coins artificially inflated.
McAfee and his team used the Popular Twitter Account of John Mcafee to tout “various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives,” alleges SEC.
The Justice Department has also put a number on earnings through crypto fraud.
“McAfee Team members collectively earned more than $2 million in illicit profits from their altcoin scalping activities,”
John McAfee and James Watson together are accused of multiple asset-related frauds such as commodities and securities fraud conspiracy, wire fraud, and touting fraud conspiracy.
Mr McAfee has denied the allegations. He wrote on Twitter,
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
What does It Mean For Crypto Traders?
Crypto Traders should be aware of crypto frauds and bandwagons. The scalping techniques and ‘pump and dump‘ are the most common types of crypto frauds. Do not fall for currencies without any intrinsic value. If profits and claims of a coin surging in value seem too good to be true, then maybe they really are too good to be true. Moreover, do your own research before buying any asset.