John McAfee Indicted for Multiple Charges Related to Cryptocurrency

Courtesy of

Stephen Gwon, Contributing Writer

On March 5th, 2021, the Department of Justice formally charged John McAfee, the founder of successful cybersecurity company McAfee Associates, with crimes related to fraud and money laundering. According to the announcement on the indictment, which was released by the US Attorney’s Office for the Southern District of New York, McAfee and members of his “McAfee team” (a cryptocurrency team) allegedly took part in multiple fraudulent schemes that revolved around the transaction of cryptocurrencies.

The schemes heavily relied on the use of McAfee’s Twitter account, which currently boasts about one million followers (784,000 at the time of his exploits). Manhattan US Attorney Audrey Strauss stated in the announcement that McAfee and Jimmy Gale Watson Jr., a member and executive adviser of the “McAfee team,” would reportedly utilize and exploit his following by publishing messages on his account which touted “various cryptocurrencies through false and misleading statements to conceal their true, self-interested motives.” Subsequently, the cryptocurrencies mentioned in these posted messages would increase in value. This increase in popularity was due to John McAfee’s image “as an expert on cybersecurity and cryptocurrency.” This image was, in the words of the indictment, built through “public tweets, speeches at industry conferences and on YouTube, and his role as the CEO of a publicly traded cryptocurrency company.”

Once the prices of these cryptocurrencies artificially inflated, McAfee and his team would sell their own share of these cryptocurrencies, which they had purchased beforehand, at an elevated price. In the same announcement, FBI Assistant Director William F. Sweeney Jr. called this an “age-old pump-and-dump” or “scalping” scheme, and detailed that due to this operation, McAfee and his associates reportedly “earn more than $2 million in illicit profits.”

The indictment also detailed another fraudulent scheme, in which McAfee and other individuals “collectively earned more than $11 million” by also using his account to promote “initial coin offerings” (ICOs) while hiding the fact that “the ICO issuers were compensating [them] for promotional tweets.” In other words, McAfee advertised the events when certain cryptocurrencies became available to the public without disclosing the fact that he was paid by the issuers of the cryptocurrencies to do so.

[McAfee is] currently detained in Spain for his tax evasion charges and is waiting to be extradited.”

McAfee, who has had multiple encounters with the law—including being arrested for unlicensed drug manufacturing and possession of an unlicensed firearm (but was released without charge), fleeing his Belizean home after being confronted by authorities over the death of a neighbor, and being arrested for tax evasion—is currently detained in Spain for his tax evasion charges and is waiting to be extradited. McAfee and Jimmy Watson, who was arrested in Texas on March 5th, both face a seven-count indictment. Their charges include one count of conspiracy to commit commodities and securities fraud, one count of conspiracy to commit securities and touting fraud, two counts of conspiracy to commit wire fraud, two counts of substantive wire fraud, and one count of conspiracy to commit money laundering. If both are found guilty of all charges, they may face a maximum of 100 years in prison as well as financial penalties.