John McAfee, a legendary computer programmer, who got involved into the blockchain industry during an ICO wave and heavily promoted various tokens, was charged by the SEC for nondisclosure of payments he received for such promotions.
As many blockchain market participants know, John McAfee was very vocal about investing into tokens, supporting, endorsing, and marketing a number of ICOs in his Twitter account and at various conferences. He appeared to be impartial and independent. According to the SEC findings, Mr. McAfee was paid over $23 million in digital assets for such promotions, which he denied. Under the U.S. law, the investors are entitled to know whether the promoters are being compensated by the issuers of securities. Also, the SEC alleges that John McAfee made other false statements misleading the public about his personal investments into certain tokens and his advisory role in some ICOs.
In addition, the SEC claims that John McAfee was also involved in another scheme of touting certain tokens he had accumulated on Twitter and then selling those tokens as prices rose. This was essentially a "pump-and-dump" practice, which is illegal under the U.S. securities law.
As a result, the SEC charged John McAfee and his bodyguard Jimmy Watson Jr., who assisted him in these cases with violating antifraud provisions of the federal securities laws, McAfee with violating the anti-touting provisions, and Watson with aiding and abetting McAfee’s violations. The SEC seeks permanent injunctive relief, conduct-based injunctions, return of allegedly ill-gotten gains, and civil penalties in addition to bar McAfee from serving as a public company officer and director.
The complaint against John McAfee and Jimmy Watson, Jr. was filed in the U.S. District Court for Southern District of New York.
Summarized by Katrina Arden
Attorney and founder of Blockchain Law Group