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"

TRON: Block Japanese IP Addresses to Prevent Use of Gambling dApps

  • TRON Foundation clarifies that Japan-based users may not access gambling-related decentralized applications (dApps).
  • TRON explains that Japan's regulations prevent users from accessing and using online gambling websites or apps.

TRON Foundation, the main organization supporting the ongoing development and day-to-day operations of Tron (TRX), one of the world’s largest platforms for building and deploying decentralized applications (dApps), published a blog post on March 31 in which they have made some clarifications regarding creating gambling-related dApps.

Notably, one of the most widely implemented use cases for blockchain technology on cryptocurrency or tokenized platforms have been gaming and gambling-related apps. However, the digital asset space is still its early stages of development and most jurisdictions have not yet prepared a comprehensive regulatory framework for cryptoassets.

TRON Foundation Clarifies Its Stance on Gambling dApps In Japan

Acknowledging that it has been “striving to promote blockchain technology” while encouraging software architects to build a diverse set of dApps on its network, the TRON Foundation has clarified in its official blog post that it intends to “adhere to local laws and regulations across the globe.”

According to the TRON Foundation’s blog, the organization aims to “strictly conform with relevant laws and regulations in Japan.” Moreover, the foundation’s blog mentions TRON “does not encourage or recommend any gambling dApps [for] the Japanese market.”

TRON Suggests Blocking Japanese IP Addresses

Notably, TRON also “suggests [that] developers who are working on gambling apps block users with Japanese IP addresses.” It adds that programmers who are building gambling-related dApps on TRON's platform should refrain from “facilitating the use of gambling apps among Japanese users.”

The foundation also noted TRON will “collaborate with [the] Japanese government and provide necessary support if any [TRON-based] dApps violate Japanese laws and regulations.”

TronBet Records Over $40 Million In Weekly Profits

As CryptoGlobe reported in early March 2019, TronBet, a decentralized betting platform deployed on the Tron blockchain, had recorded an all-time high in weekly profits of $41 million.

Twitter user vance revealed (at that time) that users had been wagering huge amounts through TronBet - as the app had reportedly been averaging daily profits worth between $75,000 to $100,000.

The user had also pointed out via the microblogging social media network that the “top user” on TronBet had “wagered $98 million” and “the top 20 users” had “wagered $455 million” in only a 1-week period. According to these estimates, the TronBet dapp may have recorded profits of almost $36 million “with [a profits to earnings] P/E ratio of 1,” vance claimed.