SEC Launches its Own Fake ICO as Warning to Investors

Avi Rosten
  • The SEC's very own coin named "HoweyCoin" comes complete with a website featuring a team, testimonials and a whitepaper
  • The regulator hopes the fake coin will educate would-be investors about fraudulent ICOs

The SEC (The US Securities and Exchange commission) has today announced an intriguing new initiative designed to educate investors about fraudulent ICOs.

The regulator has launched its own ICO - HoweyCoin - complete with a website showcasing the ICO pre-sale, team, whitepaper - and even tweets touting the potential of the new coin.

The coin aims to revolutionize the travel business, explaining that most travel businesses need “processing, centralized currency and…nickel and dime fees that add up to literally billions.”

Howeycoin differs, however, because:

“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!”

HoweyCoin

The twist is that HoweyCoin is fake - and users who try and invest in the sale are redirected to the SEC’s educational site which reads:

“If You Responded To An Investment Offer Like This, You Could Have Been Scammed – HoweyCoins Are Completely Fake!”

SEC

Presumably named after the legal “Howey test” that the SEC uses to determine whether a financial instrument is a security, the ICO claims that investors can expect to receive 1-2% returns and offers token sale discounts to early investors alongside pictures of exotic locations.

In a press release, the SEC explained that the whitepaper included on the site was designed to mimic other whitepapers, and features:

“a complex yet vague explanation of the investment opportunity, promises of guaranteed returns, and a countdown clock that shows time is quickly running out on the deal of a lifetime."

SEC

While many within the crypto world regularly express their discontent with regulatory bodies and see them as stifling the industry, this latest move from the SEC will no doubt serve as an important warning to would-be investors, and might at least raise a smile from the regulator’s detractors.

Featured Image Credit: "Securities and Exchange Commission" by "Scott S" via Flickr; licensed under "CC BY 2.0"

Alipay Reaffirms That Making Payments for Crypto-Related Transactions Is Prohibited

Siamak Masnavi

On Thursday (October 10), Chinese payment platform Alipay, reaffirmed its negative stance on the use of its payment service for crypto-related transactions.

Alipay, which is a leader in mobile and online payments, was established in China in 2004 by Alibaba Group, and currently has over a billion users. Like Apple Pay, WeChat Pay and PayPal, it "overlays traditional card payment methods."

On October 9, Binance announced the launch of a P2P crypto trading service, with support for trading BTC, ETH and USDT against CNY (Chinese Yuan), and said that this feature will initially be available only in China and it would be accessible via the Android version of the Binance mobile app.

Later, Binance CEO Changpeng Zhao (aka "CZ") confirmed on Twitter that users of the app could use Alipay or WeChat Pay to make fiat payments for these trades:

Now, however, it seems that Alipay has heard about this and wants its users in China to know that paying for crypto on its platform is still prohibited.

As the tweet below by Dovey Wan (a Founding Partner of Primitive Ventures) shows, the Alipay Security Center communicated this message earlier today (October 10) on Weibo:

Not to be outdone, just as we were about to publish this article, WeChat Pay made a similar announcement, as you can see from the following tweet by Wan:

 

Featured Image Courtesy of Alipay