Published: Thu, May 17, 2018
Business | By Tara Barton

SEC Launches HoweyCoin Parody Website Highlighting the Risks of ICOs

SEC Launches HoweyCoin Parody Website Highlighting the Risks of ICOs

The page then continues to outline the red-flags the SEC planted on the HoweyCoins' site to demonstrate the false advertising practices that many scam projects employ to rope in investors.

On Wednesday, the Securities and Exchange Commission's Office of Investor Education and Advocacy launched a mock initial coin offering (ICO) website, complete with a nine-page whitepaper, a suspicious set of founders, and overzealous celebrity endorsements.

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 2017, they generated $5.6 billion and this year, that figure has nearly been surpassed with seven months of the year remaining.

The name HoweyCoin references the Howey test that has been used to determine whether a transaction is an investment contract.

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"We embrace new technologies, but we also want investors to see what fraud looks like", SEC Chairman Jay Clayton said, noting that the rapid growth of the ICO market has been "fertile ground for bad actors". One of these, @boxingchamp1934, appears to be poking fun at Floyd Mayweather, who endorsed a fraudulent ICO that exit scammed after raising $32mln. Since it's creation the unit has been actively focusing on ICOs as the largest potential threat to investors. There's a list of reasons to invest and make money through the platform.

"HoweyCoins utilize the latest crypto-technology to allow travellers 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!"

He added referring to the big discounts fake ICOs often have on offer to lure in victims; "Buy at a 25% discount today because tomorrow it's going to be full value?"

The SEC's spoof has been well received even by entrepreneurs in the crypto space who are normally wary of regulatory bodies. "I encourage investors to do their diligence and ask questions".

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