- US SEC tries to warn ICO investors by setting up fake ICO HoweyCoins.
- The ICO website links back to a warning from US SEC.
United States: The US regulators have taken a new dimension to warn and safeguard investors against fraudulent ICOs. The US Securities and Exchange Commission (SEC) pitched a new supposedly fake initial coin offering called HoweyCoins. The ICO presents investors with a lifetime chance of making money from “sun-soaked beaches and crystal-clear waters.” What more? It offers something even more valuable, which is an advice on how to avoid being duped by fraudulent ICOs.
The US SEC launched the fake ICO purposely to educate investors on the dangers of too-good-to-be-true ICO startups. HoweyCoins, the fake ICO, has a well-design, beautiful website, complete with a whitepaper, and pictures of fake celebrity promoters and opulent destinations. The HoweyCoins team claimed the ICO offers as low as 1% daily returns and protects against inflation by combining “the magic of coin trading profits and the excitement and guaranteed returns of the travel industry.”
When the “Buy Coins Now!” button is clicked, it redirects to the website of US SEC where a stark warning is posted stating:
“If you responded to an investment offer like this you could have been scammed – HoweyCoins are completely fake!”
The deceiving website can be concluded to be the US regulator’s latest ploy to try to prove to investors that ICOs – in which firms offer digital tokens that can ultimately be exchanged for goods or services – are highly susceptible to fraud. Notwithstanding these warnings, ICO token sales still continue to raise billions of dollars.
Yesterday, one of the lead enforcers at the US SEC informed members of Congress that Initial Coin Offerings are now among the “greatest threats” to unsuspecting investors. Co-head of the SEC’s enforcement division, Steve Peikin, told a House panel that the SEC has “dozens of investigations that are ongoing” with the main focus to determine if some particular tokens are securities.
This gimmick is not the first, the US SEC had previously used a similar ploy to warn unsuspecting investors against the dangers of fraudulent ICOs. SEC created a bogus hedge fund offering in 2003, called “GRDI Select LP”, the name is a reference to greedy.