Tax evasion, ICO advertising and Belize flight: the extraordinary life of John McAfee
The famous entrepreneur John McAfee was arrested in Spain. In the United States he faces up to 30 years in prison for tax evasion. According to U.S. authorities, McAfee earned more than $23 million from covert ICO advertising. He may be required to return those funds.
The SEC has filed suit against John McAfee. He has already been arrested
ForkLog examines the biography of one of the most high-profile and controversial figures in the Bitcoin industry.
Life before cryptocurrency
John McAfee was born in Britain, shortly after the end of World War II, but spent most of his life in the United States.
In 1967 he graduated from university and earned a bachelor’s degree in mathematics. After that McAfee chose for himself a relatively rare profession at the time — a programmer. He first worked at one of NASA’s research centers, then at Xerox and Lockheed.
In 1987 McAfee founded McAfee Associates, which to this day develops the antivirus of the same name. Contrary to popular belief, McAfee left the company in 1994 and has had no involvement with it since.
When in 2011 McAfee was bought by Intel, the former decided to rename the antivirus to Intel Security. McAfee sincerely welcomed it: «I am forever grateful to Intel for freeing me from the terrible association with the worst software in the world» (the old name was restored in 2017).
The founder of McAfee, apparently, knew well the antivirus’s reputation, because he even released a spoof video instruction on removing McAfee from a computer. In the video he is presented as an “eccentric millionaire,” posing and appearing on screen with young women, a weapon and a face smeared with white powder:
McAfee engaged in various IT ventures and founded several companies. By 2007 the businessman’s fortune, according to The New York Times, peaked at $100 million, but then declined sharply due to the financial crisis. The paper claims that by 2009 McAfee had only $4 million left.
McAfee and cryptocurrencies
In the 2010s McAfee focused on a topic that always concerned him: cybersecurity, encryption and data privacy. In 2016 McAfee took the helm of the company MGT Capital, changing its profile from developing games for social networks to cybersecurity.
Around that time McAfee took a serious interest in cryptocurrencies and blockchain: within MGT Capital there formed a “cryptocurrencies council,” led by Roger Ver and Erik Voorhees. Prior to that Ver and Voorhees had developed the BitInstant company together with the Winklevoss brothers.
Gradually McAfee’s company moved into mining and cryptocurrency operations. As McAfee himself said in an interview with Bloomberg, this activity was not only for profit but also to improve his blockchain skills.
McAfee was a vivid member of the community — perhaps that explains his active involvement in the ICO craze. The entrepreneur repeatedly joined the boards of various ICO startups. By the end of 2016 he allegedly became director of cybersecurity for the blockchain startup Equibit Development Corporation, and in 2017 — an adviser to the Russian project Universa (on the latter’s history see here and here).
Most likely all this was part of promotional campaigns, as it was accompanied by posts about projects on McAfee’s social networks. His typical tweet about a crypto project of that era was blatant promotion of yet another coin that would “change the world”:
SETHER — The first token to open the door to a new paradigm of social marketing. This is a world changing coin and a world changing concept. I urged them to let me assist. The ICO has just begun.
— John McAfee (@officialmcafee) December 20, 2017
In a short time, McAfee stopped hiding that he advertised projects with questionable reputations for money, and openly stated that one such tweet was worth $105,000. The advertising was handled by a separate organization — McAfee Crypto Team. On its site you can still find a list of “partners” consisting of unknown startups that raised funds through ICOs.
The businessman grew concerned when the U.S. Securities and Exchange Commission (SEC) began treating tokens as securities, and ICOs as unregistered sales:
«Never, not now, will I admit this. I will comply with the law now, but I will fight until my last breath to ensure that this absurd SEC ruling does not stand! It won’t!», — he wrote on his Twitter in response to the statement by the commission’s head Jay Clayton.
But just a few days later McAfee said that he had stopped working with ICOs and recommending them due to the SEC warning.
This incident shows how easily McAfee changes his position and contradicts himself. For example, he initially called Bitcoin the “gold standard,” but later denounced it as a “real shitcoin.”
And in the summer of 2017 he made the famous promise to eat his own penis if Bitcoin did not rise to $500,000 within three years, later raising his forecast to $1 million per coin. This year he declined to carry it out.
There were also quirks with McAfee’s own crypto projects. In 2018 the cybersecurity expert promised a reward of $100,000 (later raised to $250,000) for anyone who could hack his cold wallet Bitfi. Two weeks later a 15-year-old hacker did, and a month later the hack was officially acknowledged. The promised $250,000, of course, was never paid.
Tax evasion and murder allegations
Apart from ICO promotions, McAfee continually kept followers informed about his life — with the entrepreneur repeatedly involved in unusual incidents.
He has long been at odds with the American government, and the matter is not only about token promotions.
In early 2019 McAfee admitted that he had not paid taxes for eight years, claiming they were “illegal.” Soon he found himself on the run, hiding on his own yacht from the U.S. Internal Revenue Service, allegedly facing charges of tax evasion.
«I have been a fugitive for almost all my life, because I live unconventionally and tell the truth as I see it», — he said in an interview with Breaker Mag.
McAfee planned to run a campaign from the yacht: he was already twice a candidate for the U.S. presidency from the Libertarian Party (ultimately he did not win the nomination).
In the summer of 2019 McAfee said that he was being pursued by the CIA. Later, the head of his campaign said that he could have been arrested by U.S. authorities, but it turned out that he had been detained for a few days in the Dominican Republic on suspicion of illegal possession of weapons.
McAfee also complained about adversaries: in 2018 he was allegedly poisoned, and soon afterward the entrepreneur refused to speak at a blockchain conference due to threats of murder, stressing that he has lived under such pressure for the last 30 years.
About a decade ago, McAfee came under the focus of law enforcement. In the 2000s he settled in Belize and allegedly planned to produce plant-based antibiotics there. However, in 2012 Belizean police suspected McAfee of ordering the killing of his neighbor (also a U.S. citizen). The entrepreneur refused to talk to the police and fled to neighboring Guatemala.
There McAfee was arrested for illegally crossing the border. In the jail he feigned two heart attacks to buy time for his lawyers who were arranging political asylum for McAfee. But it did not work: he was eventually deported to the United States.
The strange murder and John McAfee’s Belize life story formed the basis of a full investigative film commissioned by Showtime Networks:
Much of what McAfee describes seems like dramatic fiction or an attempt to mislead. However, the arrest on October 5 confirms that at least parts of the entrepreneur’s tempestuous life story are true.
«According to the indictment, John McAfee earned millions from advertising cryptocurrencies, consulting, appearances and selling the rights to his life story for a documentary film», — the U.S. Department of Justice states.
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