Anti-virus software developer John McAfee has been charged with promoting initial coin offerings to his Twitter followers without disclosing that issuers paid him more than $23 million in digital assets for the promotions.
McAfee, 74, is the latest high-profile figure to be accused of illegally “touting” ICOs, joining celebrities including music producer DJ Khaled and professional boxer Floyd Mayweather.
According to the U.S. Securities and Exchange Commission, the cybersecurity millionaire touted at least seven ICOs to his hundreds of thousands of Twitter followers from at least November 2017 through February 2018.
Responding to “trolls who call everything that I recommend a shit coin,” he wrote in one tweet that one issuer, Sether, was “the first social marketing coin” and “its potential could equal the success of Twitter.”
McAfee’s bodyguard, Jimmy Gale Watson, was also charged with “substantially assist[ing] McAfee’s touting and scalping schemes.”
“Potential investors in digital asset securities are entitled to know if promoters were compensated by the issuers of those securities,” Kristina Littman, chief of the SEC’s Cyber Unit, said in a news release. “McAfee, assisted by Watson, allegedly leveraged his fame to deceptively tout numerous digital asset securities to his followers without informing investors of his role as a paid promoter.”
McAfee had increased his Twitter following to 784,000 as of Feb. 17, 2018, in part by becoming a booster for bitcoin. As he gained fame in the digital asset community, the SEC said in a civil complaint, ICO issuers began asking him to promote their upcoming digital asset offerings.
The ICOs he promoted raised at least $41 million and he made approximately $23.2 million in secret compensation, demanding an upfront payment in bitcoin in addition to a percentage of the digital assets offered in the ICOs and, later, a percentage of the total funds raised from investors.
After one Twitter user suggested he was being paid for his recommendations, he replied: “Get [obscenity] real. There is no amount of money that could make me say something I do not believe, or something I think may not happen.”
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