John McAfee: Bringing Attention, or Pumping Altcoins Irresponsibly?
John McAfee is infamous for ... well, lots of reasons. And he's been doing nothing to change that as of late with his increased involvement in the cryptocurrency space.
That's because McAfee has been causing quite the stir in the ecosystem lately. He's begun this new Twitter campaign called "coin of the day." He picks a small altcoin, writes a small blurb on it, and then does the same with a new coin.
The problem is that people are accusing McAfee of shilling. Once he reps one of these coins, its price surges acutely before crashing back down. Sounds like a classic pump and dump scheme, does it not?
So some people are mad: they say McAfee is shipping lackluster coins so he can make some quick bucks each and everyday.
Others are happy: they're using McAfee's "pumps" to make a quick buck for themselves.
Let's dig a little deeper, shall we?
Five days before Christmas, McAfee announced his new campaign to the world:
No one really knew what to expect at that point. And then McAfee started his highlighting tweets. To date, he's tweeted out on projects like:
These shout-outs look like the following tweet:
And these shout-outs are having a tangible effect on the cryptocurrency markets. For example, Digibyte's price shot up over 120 percent after McAfee recommended it to the community.
So are these tweets for real, or is this pure shilling?
Many aren't happy
It didn't take long before investors in the community started sounding the "shill alarm" on McAfee. Some pointed to a December 7th tweet as evidence that McAfee is getting paid to pump coins:
Users have also been passing around pictures of alleged private messages that suggest McAfee's accepting pump requests; but, it's also worth noting that these pictures would be readily easy to fake, so they're far from conclusive in and of themselves.
Others have pointed to massive pre-pump buys in the coins McAfee's been highlighting. This dynamic would seem to suggest he's buying in before everyone else and then exits once he's riled the market up. Pretty cheap, if true.
And, while McAfee doesn't likely care about the dictates of U.S. authorities, if this episode is true, then he's surely running afoul of the Securities and Exchange Commission's recent declaration that celebrities must disclose their personal stakes in the crypto products they help market.
Thus, in failing to disclose his personal holdings of these coins, McAfee would be running afoul of the SEC on paper. Whether anything will come from that remains to be seen.
Not everyone's mad though. Indeed, some users have been devising trading bots to capitalize on McAfee's tweets. He reps a coin, and then these bots go to work, getting in and out before the price crashes back down.
But there have already been big losers from McAfee's "coins of the day." Those who tried to buy in on the pump but who actually bought in at the top.
The ensuing firestorm has caused McAfee to walk back his initial campaign. Per a new tweet, he'll now be shifting to a "coin of the week" model:
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.