SEC Launches Fake ICO to Educate People on Fraud

The fake website set up by the Securities and Exchange Commission contains many of the elements — including a countdown timer — that cryptocurrency scams use to pressure consumers

In a nice twist, users pressing the "Buy Coins Now" button or attempting to sign up to the newsletter, are instead directed to page at another SEC site - that one with investor education tools and tips.

The website reveals that HoweyCoin is now in the middle of its ICO presale, giving investors just a little more than two weeks to purchase their tokens at a 15 percent discount.

The SEC's fake Web site, HoweyCoins.com, is a wink to the so-called Howey test that emerged from a 1946 Supreme Court ruling to define securities. In recent months, the SEC has made clear it thinks that new digital tokens-which promoters have tried to pass off as akin to subway tokens-are clearly securities.

Okay, that's not actually true, but the agency has constructed a clever campaign meant to teach investors how to identify ICO scams - and troll the fraudsters who continue to operate them. However, the USA 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. The SEC, of course, hasn't completely banned ICOs across the country, although they do believe the industry is filled with scam opportunities. "These savings will be passed on to you and the earlier you get in on the HoweyCoins ICO the greater the discounts are going to be". The end result is a website that educates users about the dangers of ICOs in a creative way.

In a press release, the SEC noted how easy it was to whip up the fake website.

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In 2017 the regulator established a dedicated cyber unit to combat fintech and cyber-related crimes. In January 2018, the agency stopped a fast-moving ICO that was seeking to raise an incredible $1 billion from thousands of investors in an effort to create "the world's first decentralized cryptocurrency bank".

"Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals", said Donley.

The SEC's spoof ICO launch, HoweyCoins website breaks down the red flags of fraudulent fundraising to educate potential victims.

HoweyCoins says it combines the "blockchain and travel" to offer ICO participants massive discounts on travel expenses. There's a list of reasons to invest and make money through the platform. The fake company claims to "capture the magic of coin trading profits AND the excitement and guaranteed returns of the travel industry".

The details of HoweyCoins are set out in a report on the website, and the project is being backed by a famous institution known as ... the Securities and Exchange Commission.

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