financemagnates.com
The civil cases in the US against deceased tech mogul John McAfee came to an end as the Commodity Futures Trading Commission (CFTC) dropped the case against him for cryptocurrency pump-and-dump.
The US regulator announced on Monday that it reached a settlement with Dallas-based Jimmy Gale Watson for his involvement in the crypto pump-and-dump scheme, ordering him to pay more than $290,000.
Watson is a former Navy Seal and became the personal bodyguard of McAfee in 2017. He later became the executive advisor of McAfee’s cryptocurrency team.
McAfee endorsed dubious cryptocurrency initial coin offerings (ICOs) at the peak of the crypto market demand to millions of his social media followers. He was called out by the community for promoting controversial projects and soon came under the regulatory radar.
According to the CFTC, Watson helped McAfee by promoting the shady initial coin offering schemes and received undisclosed rewards in return. The duo accumulated digital assets in the anticipation of a price jump after the endorsement and then sold their holdings, like a classic pump-and-dump scheme.
Actions of the Regulator
The CFTC slapped charges on both McAfee and Watson in March 2021. However, the mysterious death of the cybersecurity expert in June last year only left his former bodyguard to face the charges. It was also the first action of the US regulator against a crypto pump-and-dump scheme.
Watson has been ordered to disgorge over $146,000 of the ill-gotten proceeds, along with a civil monetary penalty of an equal amount. He further consented to a permanent injunction order that would prohibit him from future violations of US regulations, along with registration and trading bans.
“The CFTC will continue actively to use its enforcement authority in the digital asset space to combat fraud and manipulation,” Gretchen Lowe, CFTC’s Acting Director of Enforcement, said.
Watson also entered into a similar settlement and accepted a banning order from the Securities and Exchange Commission (SEC) against civil chargers. He is still facing criminal charges brought by the Justice Department.