The US Securities and Exchange Commission (SEC) has launched a spoof Initial Coin Offering (ICO) website dubbed HoweyCoins in a bid to educate and warn investors of the dangers posed by the ICO Wild West.
SEC is currently pursuing a dozen companies for allegedly conducting ICO exit scams. However, the US agency is not content with dealing with fraudulent ICOs after the fact and instead hopes to educate investors to prevent such scams being successful in the first place.
HoweyCoins bears all the hallmarks of language and graphics used to entice investors to part with their cash, including a large countdown timer, promises to partner with established companies in other industries, promises to register with SEC itself, and, of course, high returns on original investments.
The website also it combines the “blockchain and travel” to offer ICO participants massive discounts on travel expenses. The fake company claims to “capture the magic of coin trading profits AND the excitement and guaranteed returns of the travel industry.”
“The rapid growth of the ICO market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors,” said SEC Chairman Jay Clayton. “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.”
In a white paper, downloadable through the website, more indicators of a potential scam are present. Potential investors are lured with a pledge of holiday discounts and cost savings of 30 to 40 percent based on “projected” HoweyCoin future values as well as a mild warning that these savings will likely decrease after the ICO event.
Images of an expensive lifestyle and luxury, a “white paper” which shows convoluted research of some kind, a countdown clock, a bonus percentage for participating, and baseless promises of riches to come. This is a recipe that many fraudulent ICOs use — and HoweyCoins mimics well.
However, anyone that clicks the “Buy Coins Now” link is instead diverted to an investor education page with advice from the US agency.
And the SEC went as far as creating fake Twitter accounts for each of the “celebrities” that endorsed the Howey Coin. All in all, it’s a pretty good fake — if it were real, the page would have likely convinced at least a few unwitting investors to sink their money into Howey Coin.