To slightly co-opt a popular movie quote, bonkers is as bonkers does.
Exhibit A: OG anti-virus software guru John McAfee. When last we left the scruffy libertarian iconoclast, he had been arrested by Spanish police in October and was facing possible extradition to the United States over tax evasion charges. Oh, and the Securities and Exchange Commission had sued him for failing to disclose that he had been paid on the order of $23 million to promote various initial coin offerings via his Twitter account.
Apparently, tweeting from your jail cell is a thing in Spain and McAfee has continued to update the outside world and his one million followers on the quality of prison food, the character traits of some of his fellow prisoners, and his view of Cyndi Lauper’s New Year’s Eve performance.
But McAfee had something new and more serious to tweet about this weekend, after the SEC, the U.S. Attorney for the Southern District of New York, and the Commodity Futures Trading Commission piled on a bunch of new charges for criminal fraud, conspiracy, and money laundering over the ICO deals, plus a newly alleged cryptocurrency “pump and dump” scheme in 2017 and 2018. On Twitter, McAfee maintained that all his crypto deals were legit and noted that one coin he promoted, Dogecoin, has been taken up recently by Elon Musk. I wonder if the criminal defense bar knows that one yet: the “Elon Musk copied me” defense.
The criminal indictments and related affidavits make interesting reading. Here’s three pieces of advice for would-be schemers to keep in mind in the future:
First, don’t assume your private digital communications will stay that way. The indictments are filled with quotes from McAfee’s chatter with his body guard, Jimmy Gale Watson Jr., and other associates. While McAfee was publicly tweeting his excitement about various obscure and thinly traded digital currencies, he was secretly buying them ahead of time and selling as soon as his followers pushed up the price. For example, at 1:51 a.m. On December 24, 2017, he Skyped one associate ordering a purchase of Reddcoin. “I will post tomorrow about Reddcoin. If it reaches 60% above what I paid for it please sell,” he wrote. How did the feds get the quotes even if McAfee deleted them? Could have been stored on a server, could have been on the receiver’s phone, could have been in a backup of his phone, etc. Assume almost any typed and transmitted secret can be exposed.
Second, don’t think you can fool the squares in the FBI by using hipster jargon. When McAfee tweeted to his followers that another obscure coin, Tron, was “a long term Hodl,” FBI special agent Brandon Racz did some research. Based on “my review of various materials published online, I have learned that ‘Hodl’ is slang in the cryptocurrency community for holding a cryptocurrency rather than selling it, and that an investor who does so is known as a ‘Hodler.'” (Good job, agent Racz. Do “diamond hands” next!)
Finally, it’s the Google searches, it’s always the Google searches that get you in the end. Watson’s search history included “regulatory laws trading cryptocurrency,” “bad actor definition,” and “fraudster defined.” Unfortunately, whatever he and McAfee gleaned from those searches didn’t keep them out of trouble. But it did add to the evidence pile that they knew what they were up to might be improper.
If and when McAfee is extradited for trial, perhaps he’ll have a more compelling explanation for all his chatter and trading. Until then, don’t say you weren’t warned.
Aaron Pressman
@ampressman
[email protected]
NEWSWORTHY
Can you feel it coming in the ethereum tonight? Good thing I already wrote about NFTs and crypto art auctions, because now everyone is getting in on the act. Twitter CEO Jack Dorsey is selling off a token giving ownership of his first tweet ("just setting up my twttr" – not exactly the Mona Lisa of social media) at online auction site Valuables. The current high bid is $2,500,000. In other bubble news, the latest hard-to-believe SPAC merger sees the quantum computing startup IonQ merging with publicly traded shell company dMY Technology Group Inc. III in a deal that will value the resulting product-free, revenue-less startup at $2 billion.
Tearing up. Oprah Winfrey's interview of Prince Harry and Meghan, the Duchess of Sussex, aired on CBS last night. It was a) a mind blowing dive into racism and other subjects, and b) had no tech angle. Sadly, though, there are still plenty of tech angles on racism. Employees at Google who reported complaints of racist incidents were sometimes told to take medical leave and seek mental health counseling, NBC News reported on Sunday. Google said all concerns raised to HR "are investigated rigorously, and we take firm action against employees who violate our policies.”
Our best product pipeline ever. How many years did we hear rumors of an Apple phone before we actually got one? Because usually reliable analyst Ming-Chi Kuo of TF International Securities has a new product forecast for the iPhone maker stretching out at least a decade. Apple will release a VR-type headset in mid-2022, AR glasses in 2025, and smart contact lens by "2030-2040," Kuo wrote this weekend. MacEyes? IContacts? EyeView Pro? In less exciting Apple news, the company discontinued its iMac Pro computer, perhaps a signal of some new products arriving soon. The rumor mill says the entire iMac line is getting an overhaul with Apple-designed processors, a new more squared-off design, and a choice of several colors for the casing.
Peering beneath my writing arm. The Chinese hacking attack into Microsoft's Exchange email software has penetrated at least 60,000 organizations, including everything from the European Banking Authority to electric utilities to senior citizen homes. The Biden administration on Saturday warned of the seriousness of the attack and said it would retaliate. In a different hacking attack, data was stolen from major airline frequent flyer programs. Hackers were caught scooping personal data for a month from SITA Passenger Service System, an IT services provider for over 400 airlines.
Slumdog trillionaire. Not quite like falling from first to worst, but with Tesla's stock market value stuck in reverse, CEO Elon Musk lost $27 billion of his net worth in one week. With only $156.9 billion left, Musk also lost the top spot in Bloomberg's Billionaires Index, falling behind Jeff Bezos. In other Bezos adjacent news, the outgoing Amazon CEO's ex-wife, Mackenzie Scott, has remarried, tying the knot with Seattle area school teacher Dan Jewett.
Ding-a-ling-a-scam. Does it seem like your phone is ringing with more spam calls than ever? It's not your imagination. The level of so-called robocalls climbed back to pre-pandemic levels in February. That's an average of 159 million times a day someone somewhere is being reminded that they are wanted in Texas for Social Security fraud or have an insurance payout in their name.
FOOD FOR THOUGHT
Remember the famous marshmallow test? Toddlers were given a marshmallow and told if they saved it, they would get two later. Supposedly, kids who failed were more likely to struggle later in life. Nope.
Following the Bing children into their 40s, the new study finds that kids who quickly gave in to the marshmallow temptation are generally no more or less financially secure, educated or physically healthy than their more patient peers. The amount of time the child waited to eat the treat failed to forecast roughly a dozen adult outcomes the researchers tested, including net worth, social standing, high interest-rate debt, diet and exercise habits, smoking, procrastination tendencies and preventative dental care, according to the study published in the Journal of Economic Behavior and Organization.
“With the marshmallow waiting times, we found no statistically meaningful relationships with any of the outcomes that we studied,” UCLA Anderson’s Daniel Benjamin, who brings expertise to the study that includes behavioral economics and statistical methodology, says in an interview.
IN CASE YOU MISSED IT
Here’s what it’s like on Clubhouse, the hot chat app that’s become a Silicon Valley obsession By Danielle Abril
When it comes to tech stocks, should you buy the dip—or tear up the playbook? By Anne Sraders
How Clubhouse is engaging with Native American communities By Danielle Bernabe
Meet the maker behind the world’s first-ever PMS gummy vitamin By Rachel King
‘They’re laying a trap’: Everything to know about the new Bitcoin tax rules By Chris Taylor
Bitcoin’s other high price: The surging currency is leaving a massive carbon footprint By Shawn Tully
A boom in out-of-state telehealth is threatening in-state providers By Matt Volz and Kaiser Health News
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
There are so many emojis built into our operating system software now that it's hard to pick a favorite. Maybe 🍩 or 🐶 for me. But did you know that there's an elaborate process for selecting which little pictograms get inserted into our global emoji bank? It's run by the Unicode Consortium’s emoji subcommittee chaired by Jennifer Daniel. And now Daniel has started a newsletter and it's really good, even if you're not an emoji nerd. The latest issue delved into why a few years ago some emojis appeared as different genders on different devices and what the committee did about it. A few weeks ago, Daniel explained some of the pandemic-related additions for this year. All I can say is I'll be 👀 the newsletter and I hope you start your week 💪.
