Celebrities’ needs to promote according to the law and regulation or scan better their endorsements

So say the CFTC.

The Commodity Futures Trading Commission filed a complaint charging businessman and computer programmer John McAfee, previously of Tennessee, and his former employee Jimmy Gale Watson, for engaging in a manipulative and deceptive digital asset “pump-and-dump” scheme.

According to the complaint, the defendants secretly accumulated positions in digital assets, deceptively promoted the digital assets through social media as valuable long-term investments, then sold their holdings as prices rose sharply following McAfee’s deceptive endorsements, resulting in profits in excess of $2 million. The scheme involved numerous digital assets, including verge (XVG), dogecoin (DOGE), and reddcoin (RDD). This enforcement action is the first brought by the CFTC for a manipulative scheme involving digital assets.

According to the CFTC’s complaint, the defendants strategically selected digital assets suitable for their scheme. As is typical of pump-and-dump schemes, they secretly accumulated a position in a digital asset through bitcoin trading in anticipation of price spikes following McAfee’s misleading public endorsements on social media. They “pumped” in the form of touting the asset in order to increase demand, while deceptively concealing the previously accumulated position and the intent to promptly sell the position. The defendants then “dumped” the digital asset by selling it into the inflated demand as price levels rose in response to their deceptive touting.

In its continuing litigation, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC regulations, as charged.

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