SEC Launches Mock Website to Highlight ICO Risks
The fictitious site, HoweyCoins.com, shows many sales tactics in which an investor is attracted by the fraudulent ICOs.
The Securities and Exchange Commission (SEC) is out with a new idea to highlight the risks of the booming ICOs market, which has grown rapidly with estimates topping $4 billion in token sales in 2017 alone.
The SEC’s Office of Investor Education and Advocacy (OIEA) has created a bogus initial coin offering (ICO) website that advertises a ‘too good to be’ true investment opportunity. The regulator said it wants to explain that as with many other hyped markets, scammers are never far behind in trying to take advantage of cryptocurrency-based schemes.
Join the iFX EXPO Asia and discover your gateway to the Asian Markets
The fictitious site, HoweyCoins.com, shows many sales tactics in which an investor is attracted by fraudulent ICO advertisements. Thus it educates potential investors about what to look for before they invest in a scam. The website offers education tools from the SEC and other regulators using creative ways, such as showing tips when the user clicks on “Buy Coins Now” buttons.
Suggested articles
World's Biggest Vessel Opens Gates for 2019 Coinsbank Blockchain CruiseGo to article >>
The SEC added that most ICO providers fail to disclose the value of their projects, making it hard for investors to distinguish between legitimate and fraudulent intentions. As such, the launch of its mock site aims to detail the risks that ICOs present to investors, claiming they provide the ideal environment for scammers.
The SEC recently issued multiple trading suspensions and halted several token sales. Earlier in January, the agency halted a fast-moving initial coin offering (ICO) that was seeking to raise up to $1 billion from thousands of investors to develop “the world’s first decentralized cryptocurrency bank.”
SEC Chairman Jay Clayton commented: “The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors. We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud. Distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. I encourage investors to do their diligence and ask questions.”
Owen Donley, Chief Counsel of the SEC’s OIEA office, added: “Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals. But fraudulent sites also often have red flags that can be dead giveaways if you know what to look for.”
I’ve been to the site, and I understand the SEC is looking out for our best interest and all, but does anyone how to actually get Howey Coins? I keep getting redirected to the SEC website, but then they don’t tell me how to buy them. They just keep saying that they made the company up, and that’s fine with me. I’ve got no problem with the SEC developing their own ICO . Especially one this capitvating, I’d imagine they look at so many other ICO’s that they were bound to come up with something eventually…but it’s like HELLO? if… Read more »
Sec