John McAfee, the creator and owner of the tech-security software, faced charges of engaging in market malpractice called "pump and dump", which entailed the promotion of certain cryptocurrencies on social media platforms to increase their value.
According to the United States Justice Department's indictment, Jimmy Watson and McAfee were put up to face charges of fraud, conspiracy and money laundering in an attempt to manipulate the prices of the cryptocurrencies.
Audrey Strauss, a US attorney stated, "McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception", reported AFP.
McAfee, Watson, and other members of their "cryptocurrency team" allegedly "raked in more than $13 million from investors they victimized with their fraudulent schemes," according to Strauss.
Pump-and-dump schemes typically involve over-hyping the value of stocks or, in this case cryptocurrency, by holders so that they can be sold at artificially high prices
"McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme," FBI assistant director William Sweeney said.
"When engaging in illegal activity, simply finding new ways to carry out old tricks won't produce different results", reported AFP.
McAfee and Watson also used Twitter to promote digital tokens on behalf of initial coin offerings without disclosing they were being paid for their efforts by the startups, according to the indictment.
The 75-year-old is in custody in Spain awaiting a verdict on his extradition to the US where he is wanted for charges related to tax evasion.
He has been detained at a prison near Barcelona after being arrested in the Spanish city in October right before boarding a flight to Turkey.
The arrest followed his indictment in June in the United States for tax evasion and willful failure to file tax returns between 2014 and 2018, despite earning millions from consulting work, cryptocurrencies and selling the rights to his life story, reported AFP.
McAfee, who has made millions through his widely-used computer software, has recently sparked interest in cryptocurrencies.
The software tycoon, who has over a million followers on Twitter, has described himself as a "lover of women, adventure and mystery."