Court sides with SEC in ICO promotion case against former McAfee assistant

Quick Take

  • The SEC won a final judgment in federal court against Jimmy Gale Watson, John McAfee’s assistant, for his alleged role in promoting initial coin offerings on social media.
  • Watson is barred from selling or promoting digital assets and ordered to repay almost $400,000.

The US Securities and Exchange Commission (SEC) on July 14 obtained a final consent judgment against John McAfee's former assistant Jimmy Gale Watson, Jr., for his alleged role in McAfee's initial coin offering (ICO) promotion. 

The final consent judgment with the U.S. District Court for the Southern District of New York requires Watson to pay the US Treasury $316,408 in disgorgement, the amount the SEC determined as Watson's net profit from the illegal promotion, as well as $59,533 in pre-judgment interest. 

Watson will not have to pay a civil fine, the court ruled. McAfee is alleged to have earned more than $23 million from the scheme.

The judgment also bars Watson permanently from issuing, buying, offering or selling any digital assets in any professional capacity, but he may continue to sell or buy assets from his personal accounts. 

The SEC claimed in its 2020 complaint that Watson assisted McAfee in promoting ICOs on Twitter without disclosing that he was paid to do so.

A separate charge alleged the two men engaged in a "scalping" scheme by promoting crypto assets on Twitter without disclosing that they had accumulated a large position of digital assets in McAfee's accounts with the intent of selling it. 

In a separate complaint, the US Justice Department had charged McAfee with tax evasion. The tech executive and crypto promoter was arrested in Spain in 2020, and was found dead last year of an apparent suicide.

On Thursday, the SEC filed a notice of death for McAfee in federal court, ending its case against him. 

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