Okay, Let’s Talk About John McAfee’s Paid ICO Promotions
McAfee charges $100K per tweet to promote companies that sell digital tokens to investors in crowd sales.
McAfee in 2016. Image: Flickr/Gage Skidmore
John McAfee, founder of the security software company, revealed on Friday that he charges $105,000 USD to post a tweet promoting a client’s cryptocurrency ICO to his 813,000 Twitter followers.
What’s more, McAfee told The Independent on Wednesday, he’s been “getting these fees for over six months,” something that was not previously disclosed in any of his many promotional tweets as he’s recently attempted to rebrand himself as an investment expert.
McAfee further stated that he decided to go public with the payments he’s been receiving to promote companies selling tokens that can go on to become volatile, small-cap assets (the cryptocurrency equivalent of penny stocks) because “I know that I’m in the cross-hairs of the [Securities and Exchange Commission], so it is in my interests to prove transparency.” We have not confirmed how much money McAfee has made through these paid promotions.
What piqued my interest, though, was that in media interviews and on the McAfee Crypto Team website, one of my articles is used to illustrate the “effect” of his tweets. The article in question was titled “ John McAfee Appears to Move Cryptocurrency Markets With a Single Tweet” and it ran in January. In it, I conducted a brief and unscientific study that found a pattern following McAfee’s Twitter promotions of altcoins, not ICOs: a huge price spike quickly followed by a big crash. Some of these markets slowly climbed back up, and some didn’t. When I interviewed him, McAfee attributed this spike-crash pattern to automated trading bots following his tweets.
The point of that article was not that John McAfee gives good investment advice, or even that he is particularly influential. The point, as I wrote at the time, is that “altcoin markets are volatile to an absurd extreme. More than that, they’re prone to manipulation by big players, intentional or not.” Market price spikes and bot trading (endemic to coins and tokens trading on exchanges) aren’t even related to ICOs, which often have fixed price schedules, and so it just doesn’t make sense to use my January piece to promote the practice.
Returning to the point—ICO promotions—Even if McAfee only promotes ICOs he believes in, as he has said on Twitter, there’s no way of verifying that as a truthful statement. And, broadly speaking, promoting ICO token sales that he’s paid to promote is not offering investment advice to the masses, it’s a paid advertisement for those tokens.
When reached for comment, McAfee noted that his services focus on promoting the companies, not the tokens; moreover, he added, many of the tokens are private and not on exchanges.
McAfee’s investment advice is free—the only thing you need to do to get it is to follow him on Twitter. But remember that old cliche: If you’re not paying, then you’re the product.
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Correction: This piece originally conflated ICO token promotions with altcoin promotions. Altcoins on exchanges are subject to wild and immediate price fluctuations, while many ICO tokens follow a price schedule during the sale, and may be traded on an exchange after. The headline of the article has been changed to reflect that fact, and the piece has been updated with a response from McAfee. Motherboard regrets the error.