McAfee founder faces fraud charges for alleged $23m ICO scheme

From: RegTech Analyst

John McAfee, the founder of cybersecurity company McAfee, is facing criminal charges after the Securities and Exchange Commission accused him of having failed to be transparent about being paid to promote initial coin offerings.

The SEC is accusing the businessman of having been paid $23m in digital assets to promote several ICOs on his Twitter account.

McAfee also allegedly denied having received any payment for him promoting the ICOs when investors asked him.

The complaint alleges that McAfee made other false and misleading statements, such as claiming that he had personally invested in some of the ICOs and that he was advising certain issuers.

McAfee’s bodyguard was also charged for his role in the alleged $23m scheme and is accused of having assisted his employer by negotiating the promotion deals with the ICO issuers and to cash out the digital asset payments for the promotions.

Additionally, the bodyguard is also accused of having his then-spouse tweet interest in one of the ICOs McAfee was promoting.

The bodyguard is said to have been paid at least $316,000 for his part in the scheme. According to the complaint, investors were left holding digital assets that are now essentially worthless.

“Potential investors in digital asset securities are entitled to know if promoters were compensated by the issuers of those securities,” said Kristina Littman, cyber unit chief at the SEC. “McAfee, assisted by [the bodyguard], allegedly leveraged his fame to deceptively tout numerous digital asset securities to his followers without informing investors of his role as a paid promoter.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges McAfee and Watson with violating anti-fraud provisions of the federal securities laws, McAfee with violating the anti-touting provisions, and the bodyguard of having aided and abetted those violations.

The complaint seeks permanent injunctive relief, conduct-based injunctions, return of allegedly ill-gotten gains, and civil penalties. The SEC also seeks to bar McAfee from serving as a public company officer and director.

McAfee left the cybersecurity company McAfee in 1994.

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