SEC Educates Investors With Fake ICO Website Howeycoins.com
The US Securities and Exchange Commission (SEC) has launched a fake initial coin offering (ICO) website, according to a press release May 16. The website aims to increase awareness of the typical warning signs of scam ICOs and to promote investor education.
Howeycoins.com is the mock website made by the SEC that represents a classic example of a fraud ICO website that touts an “all too good to be a true investment opportunity.” The website includes common scam ICO details such as a misleading and blurry white paper, promises of guaranteed returns, celebrity endorsements, and a countdown clock that is “quickly running out on the deal of a lifetime.”
When a visitor of the website clicks on “Buy Coins Now,” they are redirected to the website Investor.gov, which was established by the SEC to help investors avoid fraud. The website warns that if users would have responded to an investment offer like HoweyCoins, they “could have been scammed.”
Jay Clayton, SEC Chairman, commented on the matter:
- “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.”
The SEC wanted to show how easy it is to build a website promoting a fraudulent investor that would be seen as a great opportunity in the eyes of many people looking to invest in the cryptocurrency space.