You are contacting
Jean-Martin Louw
Associate
- Home
- About us
- People // Updates
- Insights
- News
- Events
- Videos and Podcasts
- Download Hub
- Insights
- What we do
- Business
- Dispute resolution
- Individuals & families
- Real estate
- Business
FinTech
CFTC brings first ever enforcement action for cryptocurrency “pump-and-dump” scheme
The US Commodity Futures Trading Commission (CFTC) has brought its first ever enforcement action for a manipulative scheme involving cryptocurrency assets.
The complaint (filed in the U.S. District Court for the Southern District of New York) alleges that businessman and anti-virus software creator John McAfee (with an accomplice) engaged in manipulative cryptocurrency “pump-and-dump” schemes, which involved numerous coins, including Verge (XVG), Dogecoin (DOGE), and Reddcoin (RDD).
The defendants are accused of accumulating positions in those assets, deceptively promoting them through social media as valuable investments, then selling their holdings as the prices jumped following McAfee’s allegedly deceptive endorsements. McAfee is said to have made significant profits in excess of $2 million.
The defendants are indicted on charges of conspiracy to commit commodities and securities fraud, wire fraud, wire fraud conspiracy, conspiracy to commit securities touting fraud, and money laundering.
Under the U.S. Commodity Exchange Act, the CFTC is empowered to regulate “commodities”, which includes Bitcoin and other virtual currencies. The position is of course different in England, where cryptocurrencies are only regulated for money laundering purposes.
9 March 2021
Related content
Subscribe
Please add your details and your areas of interest below
Article contributor
Jean-Martin
LouwAssociate
Specialising in Banking & financial disputes and Commercial disputes
FINDING OUR ARTICLES OF INTEREST? SUBSCRIBE TO RECEIVE THE LATEST CONTENT DIRECT TO YOUR INBOX
Subscribe now