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"

Binance Battles Brazilian Diplomat Trying to Register its Brand

Leading cryptocurrency exchange Binance is battling a Brazilian diplomat, Paulo Renato Dallagnol, after he registered the website Binance.com.br and its brand at the National Institute of Industrial Property (INPI).

Binance sued INPI and Dallagnol, Brazil’s vice-consul in Cyprus, after he decided to register a Brazilian version of Binance’s website on June 30, 2018. Binance, it’s worth noting, has been operating in Brazil since June 14, 2017 according to the case.

The leading cryptocurrency exchange argued the Binance brand is protected as it was registered in China, a signatory of the Paris Convention for the Protection of Industrial Property. According to local news outlet Portal do Bitcoin, Binance also argued that according to Industrial Property Law it wouldn’t have been possible for the registration to be recognized. It also pointed out Dallagnol has been a “registered use of the author’s website since December 2017, date that precedes the deposit of the Binance brand.”

The battle saw Binance get an early victory, as judge Eduardo André Brandão de Brito Fernandes, of the 25th Federal Court of Rio de Janeiro, suspended the effects of the trademark’s registration. Dallagnol was ordered to not use the Binance brand in any way, under threat of being fined. The decision, however, was preliminary as the diplomat and INPI may still fight back.

Binance.com.br’s Registration

Portal do Bitcoin points out that Dallagnol registered the name “Binance” for the Binance.com.br domain with INPI under “class 36, identifying various financial services (stock and securities brokerage; stock brokerage; financial management; advisory, consultancy and investment management of third parties, etc.)”

The diplomat’s registration was granted last year in Brazil, and was filed under the same class Binance itself uses. Even before the 25th Federal Court of Rio de Janeiro decided to bar Dallagnol from using the Binance brand, the INPI reserved a right to nullify the registration.

"The registration was granted on 7/7/2019 and is subject to an administrative nullity process (PAN), not yet decided by the INPI.”

Dallagnol, according to the news outlet, became vice-consul in Nicosia, Cyprus back in August 2018. He has a master´s degree in law from the Carlos III University in Madrid, Spain. His thesis was on the right to intellectual property.

The diplomat has in the past addressed cryptocurrencies on the website of a law firm from Rio Grande do Sul. He has also served as a specialist in digital law.

Featured image via Pixabay.