As the crypto Industry continues to grow by leaps and bounds across the globe, we get to see a lot of ICOs being launched and even the SEC, who is currently after companies that are allegedly into scam ICOs, has launched its own ICO.
The Securities and Exchange Commission (SEC), in a press release, announced that it has created an ICO and encouraged investors to grab the opportunity. The ICO, “HoweyCoin,” was dubbed after the Howey Test conducted by SEC in defining whether an investment is a security.
The tagline of the press release reads:
“The SEC Has an Opportunity You Won’t Want to Miss: Act Now!
If you’ve ever been tempted to buy into a hot investment opportunity linked with luxury travel, the Securities and Exchange Commission has a deal for you.”
What’s SEC up to?
The SEC announced that the HoweyCoin is just a mock ICO specifically created to educate investors on how to identify a fake ICO.
The mock website was well equipped with sophisticated features used by fake ICOs to entice investors, including powerful graphics, a countdown timer, and a compelling whitepaper containing endless promises such as partnering with different companies, registering with SEC, high ROI, etc.
The mock ICO, HoweyCoin, focused on the travel industry. It talks about the high fees charged by most travel companies, stated that HoweyCoin and the Blockchain are here to change the industry.
According to the website:
“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!”
However, when you clicks on the “Buy Coins Now” link on the website, it redirects to a page that educates investors on ICO investments with advice from the U.S. agency.
“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.” Jay Clayton, SEC Chair, explained.
When it comes to ICOs, anyone can quickly design an attractive website loaded with enticing offers to lure investors into giving up their money. This is the message the SEC is trying to pass across and they would go any length to see that ICO investment fraud is adequately dealt with.