Anyone who thought regulators were far behind the curve when it comes to understanding cryptocurrencies, monitoring initial coin offerings (ICOs) and educating about crypto investment scams now has to at least give the agency credit for its education efforts: The SEC has launched its own mock ICO website, complete with a fake whitepaper, fake celebrities and a fake team, to raise not money, but attention and to educate investors with regards to cryptocurrency investments and the ease of creating a scam in the modern tech world. But please don't expect the SEC to fly you anywhere exotic-because the offer isn't real. We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with numerous classic warning signs of fraud. "I encourage investors to do their diligence and ask questions".
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".
"Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals", said Donley.
The SEC said the HoweyCoins, name is a reference to the Howey test - the guideline everyone is applying to determine if an ICO is a security (even though they all are - in the US). "But fraudulent sites also often have red flags that can be dead giveaways if you know what to look for".
In a landmark 1946 U.S. Supreme Court decision, SEC v. W.J. Howey Co.
"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!"