McAfee was being detained in Spain after he was arrested on separate criminal tax-evasion charges filed by the Justice Department’s tax division. Department officials have said that his extradition to the United States is pending. McAfee and Watson could not immediately be reached for comment Friday.

Prosecutors allege that McAfee and his associates exploited the popularity of his Twitter account to run what is known as a “pump and dump” scheme.

McAfee and Watson first bought large quantities of cryptocurrencies at low prices, according to the indictment. Then, they promoted those same digital tokens on Twitter, in an attempt to inflate their prices, using false and misleading endorsements — including deceptively telling potential investors that they would disclose whether they owned the cryptocurrencies that they were recommending. But these were false assurances, prosecutors claim — next came the “dump.”

After the prices of the cryptocurrencies swelled, McAfee and his associates sold off their holdings, often at significant profit, according to the indictment, leaving investors with assets whose long-term value had substantially declined. Prosecutors allege that McAfee and Watson engaged in this “scalping” scheme from about December 2017 to about January 2018.

Prosecutors have also charged McAfee and Watson with crimes related to a second alleged scheme involving fundraising events called “initial coin
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