The SEC Just Launched a Fake ICO Website to Educate Investors

The U.S. Securities and Exchange Commission wants to ensure investors can identify fraudulent initial coin offerings – even if it has to launch its own to do so.

The regulator announced Wednesday it has launched a mock ICO called HoweyCoin, presumably named after the Howey Test, which “touts an all too good to be true investment opportunity.”

However, the company notes, “the offer isn’t real.” Users who try to invest in the token sale will instead be redirected to the regulator’s education tools, which are aimed at pointing out the signs of fraudulent token sales.

According to the HoweyCoin website, most travel businesses “require processing, centralized currency, and most importantly, nickel and dime fees that add up to literally billions.”

HoweyCoin is different, the fake site says, because:

“HoweyCoins utilize the latest crypto-technology to allow travelers to purchase all segments without these limitations, allowing HoweyCoin users to buy, sell, and trade in a frictionless environment – where they use HoweyCoins to purchase travel OR as a government-backed, freely tradable investment – or both!”

The website goes on to report that investors will receive 1-2 percent returns, and advises them to “HODL,” mimicking websites for existing fraudulent or potentially fraudulent token sales.

The site similarly features Twitter testimonials and list of its team members, though whether any of them are real is debatable – there are no social media or professional profiles linked to the names.

In a press release, the SEC also noted that the site includes “a white paper with a complex yet vague explanation of the investment opportunity, promises of guaranteed returns, and a countdown clock that shows time is quickly running out on the deal of a lifetime.”

In a statement, Owen Donley, chief counsel of the SEC’s Office of Investor Education and Advocacy, said that the site incorporates many of the hallmarks of fraudulent token sales – pertinent information for investors looking to avoid financial pitfalls.

“Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals,” said Donley. “But fraudulent sites also often have red flags that can be dead giveaways if you know what to look for.”

SEC logo via CoinDesk archives

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Comments

comments

Filed in: Bitcoin Buzz Tags: ,

You might like:

Tether Floods Into Kraken Exchange, Where Crypto Traders Can Get Dollars Tether Floods Into Kraken Exchange, Where Crypto Traders Can Get Dollars
Ethereum's Constantinople Hard Fork Is Being Delayed Until 2019 Ethereum's Constantinople Hard Fork Is Being Delayed Until 2019
Enough with the ICO-Me-So-Horny-Get-Rich-Quick-Lambo Crypto Enough with the ICO-Me-So-Horny-Get-Rich-Quick-Lambo Crypto
Global AML Watchdog to Release Crypto Regulations By Next June Global AML Watchdog to Release Crypto Regulations By Next June
Sia Network Releases Hard Fork Code to Block Crypto Mining Giants Sia Network Releases Hard Fork Code to Block Crypto Mining Giants
North Korean Hacking Group Lazerus Stole $571 Million in Cryptos: Report North Korean Hacking Group Lazerus Stole $571 Million in Cryptos: Report
Bitcoin's Price Breaks Through Key Support As Stocks Go South Bitcoin's Price Breaks Through Key Support As Stocks Go South
Crypto Exchange Huobi Now Lets Users Swap Between 4 Different Stablecoins Crypto Exchange Huobi Now Lets Users Swap Between 4 Different Stablecoins
© 2018 Virtual Mining Bitcoin News. All rights reserved. XHTML / CSS Valid.