McFee Founder Charged by SEC For Undisclosed Endorsements of ICOs

McFee Founder Charged by SEC For Undisclosed Endorsements of ICOs

John McAfee was recently charged by the US Securities and Exchange Commission for promoting ICOs without disclosing this to SEC. The founder of McFee, a international computer security company, received around $23 million as unofficial payment for endorsing 7  unlicensed ICOs.

McAfee was contacted by the ICOs in connection to an offer to promote them on his social media pages.

However, he did not disclose to the regulator that he kept close to half the payment money granted to him by ICOs, which is in direct violation to SEC guidelines. SEC reminds users that failing to disclose that your endorsements are paid for is in direct violation to SEC standards. Celebrities and VIPs are prohibited from using their social media channels for promoting securities without revealing their compensations for doing so.

SEC claimed in a statement that,

“From at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (‘USD’) in undisclosed compensation by recommending at least seven ‘initial coin offerings’ or ICOs to his Twitter followers. The ICOs at issue involved the offer and sale of digital asset securities and McAfee’s recommendations were materially false and misleading for several reasons”

The McFee founder was paid around $11 million in Bitcoin and Ethereum, plus $11 million more worth in the promoted tokens.

As a result of his advocacy, these seven ICOs raised some $41 million.

McAffe was further charged for attempting to sell to investors his worthless tokens. He was also noticed to utilize a practice called “scalping”, which involves the attempt of selling tokens as soon as their price rose.

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