CFTC marks progress in servicing John McAfee in digital asset scam case
About three months after the United States Commodity Futures Trading Commission (CFTC) charged John David McAfee with engaging in a fraudulent digital asset scheme, the regulator has provided an update concerning service of process on McAfee.
The CFTC says that McAfee currently is detained in a Spanish prison in connection with extradition requests by the U.S. Department of Justice. In accordance with Rule 4(f)(1) of the Federal Rules of Civil Procedure, the CFTC began the process of serving McAfee through the Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the “Hague Convention”) on April 14 by requesting assistance from the designated central authority in Spain for Hague Convention requests (the Spanish Ministry of Justice) and transmitting the requisite summons, complaint and other initial case documents in English and in Spanish.
On June 1, 2021, the CFTC received in the mail written acknowledgment from the Spanish Ministry of Justice of the request for assistance. The acknowledgment stated further that the request had been forwarded to the competent authorities to comply with the request.
At present, the CFTC cannot estimate how long the process in Spain will take to complete.
Let’s recall that the CFTC complaint alleges that, from at least in or around December 2017 through at least in or around February 2018, John David McAfee, Jimmy Gale Watson Jr., and others engaged in a digital asset “pump and dump” manipulative and deceptive scheme in which they fraudulently recommended to the public to purchase digital assets such as verge, reddcoin, and dogecoin.
- identified digital assets with respect to which they believed McAfee’s promotional efforts could move the market,
- secretly accumulated positions in the digital assets in anticipation of deceptively promoting the digital assets online in order to cause price spikes;
- falsely and misleadingly endorsed the digital assets via Twitter and other media as recommended long-term investments that would “change the world,” thereby exploiting the broad reach of McAfee’s public Twitter account, while concealing Defendants’ true holdings and plan to liquidate the digital assets quickly; and
- secretly sold off most or all of Defendants’ holdings in these digital assets as prices rose sharply following McAfee’s endorsements.
This manipulative and deceptive scheme caused harm to market participants who paid inflated prices for the digital assets, the CFTC says.