stack of cryptocurrencies: bitcoin, ethereum, litecoin, monero, dash, and ripple coin together, 3D rendering. New virtual money. Photo: by Wit Olszewski/Shutterstock Photo: by Wit Olszewski/Shutterstock

On March 5, 2021, the U.S. Attorney’s Office for the Southern District of New York charged John McAfee and his former employee, Jimmy Gale Watson, with conspiracy, fraud, and money laundering charges in connection with his cryptocurrency activities—specifically McAfee’s Twitter statements touting various cryptocurrencies and his false and misleading statements concerning personal investments or other involvement with those same cryptocurrencies. The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have filed civil charges against McAfee and his former colleague in separate parallel actions, each based on a different aspect of McAfee’s alleged scheme. This case and the expected upcoming congressional task force on cryptocurrencies are likely to provide the market with more clarity on how coins and projects will be treated in investigations, including whether they can be treated as securities or commodities and the relative roles of the SEC and CFTC.

In the McAfee case, the first alleged part of the scheme is a pump-and-dump. A pump-and-dump scheme generally involves a party or entity acquiring a position in a financial instrument and
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