The U.S. Securities and Stock Exchange Commission wants to ensure investors can identify fraudulent initial think offerings – even if it has to launch its own to do so.
The regulator announced Wednesday it has launched a guy ICO called HoweyCoin, presumably named after the Howey Test, which “plugs an all too good to be true investment opportunity.”
However, the company notes, “the sell isn’t real.” Users who try to invest in the token sale will instead be redirected to the regulator’s edification tools, which are aimed at pointing out the signs of fraudulent token sales.
According to the HoweyCoin website, most journey businesses “require processing, centralized currency, and most importantly, nickel and dime pays that add up to literally billions.”
HoweyCoin is different, the fake site orders, because:
“HoweyCoins utilize the latest crypto-technology to allow travelers to acquire all segments without these limitations, allowing HoweyCoin users to buy, inform against, and trade in a frictionless environment – where they use HoweyCoins to purchase move OR as a government-backed, freely tradable investment – or both!”
The website goes on to surface that investors will receive 1-2 percent returns, and advises them to “HODL,” mimicking websites for existing abounding or potentially fraudulent token sales.
The site similarly features Tizzy testimonials and list of its team members, though whether any of them are existent is debatable – there are no social media or professional profiles linked to the designations.
In a press release, the SEC also noted that the site includes “a cadaverous paper with a complex yet vague explanation of the investment opportunity, promises of promised returns, and a countdown clock that shows time is quickly contest out on the deal of a lifetime.”
In a statement, Owen Donley, chief counsel of the SEC’s Berth of Investor Education and Advocacy, said that the site incorporates divers of the hallmarks of fraudulent token sales – pertinent information for investors looking to keep financial pitfalls.
“Fraudsters can quickly build an attractive website and cargo it up with convoluted jargon to lure investors into phony deals,” judged Donley. “But fraudulent sites also often have red flags that can be precise giveaways if you know what to look for.”
SEC logo via CoinDesk archives
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