US SEC charges John McAfee for promoting Crypto ICOs

The US SEC has sued John McAfee, stating that the celebrity earned $23M money by promoting crypto ICOs on twitter through his fame.

By · Oct 6, 2020 . 5min read

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The U.S. SEC (Securities and Exchange Commission) has filed charges against John McAfee, alleging that the crypto celebrity profited by promoting 7 ICO sales on Twitter. John McAfee is the founder of the computer security company McAfee. The SEC states seven unnamed ICO issuers personally communicated with McAfee’s team to get him to endorse their ICOs openly. In return, they assured payment in those coins and Bitcoin.

The SEC alleges that McAfee used his popularity to receive $23 million by promoting at least seven ICOs. It appends that his activity included the sale of securities and his recommendations were fraudulent and misleading for various reasons. The SEC explicitly charged McAfee for declining to reveal that his endorsement for the projects were paid. Thus, directly circumventing its regulations.

For the uninformed, the trend of celebrity endorsements urged the SEC to issue an official statement. It requests the involved celebrities to reveal the scope, nature, and amount of compensation earned in exchange for the promotion. Celebrities should not utilize their social media influence to promote securities without confessing their compensation. 

John McAfee involved in scalping

Additionally, McAfee received bitcoin and ether worth more than $11.6 million. He further received $11.5 million worth of promoted tokens for his promotions of seven ICOs. The ICOs reportedly raised $41 million in the process. However, he incorrectly claims to be an investor or claims his involvement in the project. He did not disclose when he was selling his holdings.

He presented ICO data as impartial research to produce the impression that he vetted these companies and benefitted from his technical expertise. According to the regulator, McAfee has its involvement in scalping. It states that he held large amounts of cryptocurrency without disclosing his intent to sell it. He has additionally been charged with tax evasion linked to the scheme. He supposedly directed his income into bank accounts and crypto exchange accounts in the name of nominees.

The SEC aims to limit McAfee’s involvement in crypto in the future. The authority also seeks to force him to return funds and pay civil penalties. They also intend to prohibit him from acting as a company officer or director.

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