Shorter Reads

CFTC brings first ever enforcement action for cryptocurrency “pump-and-dump” scheme

1 minute read

Published 9 March 2021

Authors

Share

Key information

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.

Read the full complaint here.

Related latest updates
PREV NEXT

Arrow Back to Insights

Shorter Reads

CFTC brings first ever enforcement action for cryptocurrency “pump-and-dump” scheme

Published 9 March 2021

Associated sectors / services

  • FinTech

Authors

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.

Read the full complaint here.

Associated sectors / services

  • FinTech

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):

    Article contributor

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up
    Get In Touch Print this page
    Collyer Bristow
    ExpandNeed a hand?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.