The SEC launched a fake ICO website called HoweyCoins to educate the public on how to keep an eye out for fraudulent initial coin offerings.
The SEC Launched a Fake ICO, but Why?
HoweyCoins is meant to be an “all too good to be true investment opportunity” that shows how easy it is for scammers to set up something that looks believable.
“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,” explained Jay Clayton, the SEC Chairman. He continued, “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.”
These warning signs include things like a countdown clock to an even better opportunity, the promise of a guaranteed return, and “a white paper with a complex yet vague explanation of the investment opportunity.”
If anyone on the site clicked into any of the “Buy Coins Now” options, they would be taken to an SEC site providing investor education tools and tips.
Howeycoins was created to show the public that fake ICOs exist and the importance of not taking things merely at face value. Instead, always do your own research. The SEC launched a fake ICO to prove that it is possible to spot fake projects like this “if you know what to look for.”
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Community Reaction
The reaction on Twitter was a combination of people not understanding that Howeycoins was supposed to be fake, people not taking the point seriously, and people getting angry that the SEC would do this.
Am I the only one who doesn’t feel totally comfortable with a regulatory agency at the federal level deciding to be fun and/or wacky?
— Karate McAwesome (@KarateMc4w350m3) May 16, 2018
Don’t do it. They just want to log your ip lol
— bitcoin bitty (@nikkeilake) May 17, 2018
Raise your hand if you know #HoweyCoins are fake but you still want to buy some. pic.twitter.com/WuxWaF1AKv
— NextCipher (@NextCipher) May 17, 2018
Other users, however, appreciated that the SEC had taken the time to do this.
#howeycoins is absolutely brilliant. Great work by @SEC_News. They even wrote a whitepaper that looks and reads better than many $100m+ coins trading today.
I wonder if the SEC lawyers were secretly thinking “damn, we could do this for real and make millions . . . .”
— Juriscoiner (@juriscoiner) May 16, 2018
@SEC_News Love this! I only wish we had thought of it first. Great idea and drives home the need for investor education in this space. #ico #howeycoins
— Sara Borazan (@saraborazan) May 17, 2018
What do you think about the SEC’s decision to launch a fake ICO?
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Featured image: mohamed_hassan via Pixabay
