John Grinder

17.05.2018 14:40

The SEC launched its own fake ICO

The U.S. Securities and Exchange Commission (SEC) has launched a fake website in purpose to educate potential crypto investors by demonstrating a highly plausible one.

The aim of this project is to ensure that they can identify fraudulent initial coin offerings - even if it demands launching its own. A mock ICO was called HoweyCoin, apparently referring to the Howey Test, created by Supreme Court to determine whether certain transactions qualify as "investment contracts”. If so, the transactions are considered securities and shall meet several disclosure and registration requirements. Users receive utility tokens that allow them to facilitate the buying process whereas profit-making is not stated as a primary task. The company notes that the startup demonstrates a company which offers a too good investment opportunity to be true. It is also mentioned that the offer isn’t real. If users try to invest in the token sale, they will be redirected to an SEC page that informs on fraud involving digital assets.

s the fake site points out, HoweyCoin is based on the latest crypto technology that allows travelers to purchase all segments without limitations and therefore to buy, sell and trade in a frictionless environment. It also reports that investors receive 1-2 percent returns and appeals to them to “HODL” as fraudulent websites do. In addition, the site features a list of its members, none of which can be proved to really exist. The SEC declared that the site includes an eight-page fake white paper that gives complex but vague explanation of the investment opportunity and promises of guaranteed returns. This, it incorporates all the hallmarks of a fraudulent token website and can serve as a great tool for investors looking to avoid being misguided.

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