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"

Indian Crypto Traders Were Reportedly Not Affected By Proposed Crypto Ban

Nischal Shetty, the CEO of Indian digital asset exchange WazirX, has said that the recent recommendation from India’s government departments to completely ban cryptocurrencies has not had any negative impact on local crypto trading volumes.

Shetty, a computer science graduate from the Visvesvaraya Technology University, revealed he believes that local cryptocurrency traders will not be affected “unless [the nation’s] finance department [says or does] something concrete.”

$11 Million In Crypto Trading Volume In April 2019

In statements shared with Bitcoin.com, Shetty said that WazirX recorded its “highest trading volume” during April 2019 as the local crypto exchange processed over $11 million in trades.

According to Shetty, “similar news” regarding a potential cryptocurrency ban in India had surfaced in October 2018. However, the crypto entrepreneur revealed that the nation’s digital asset investors are no longer affected by such news. This, as local traders are “waiting for concrete information” and substantive updates regarding cryptoasset regulations from India’s government.

Local Exchanges Report Increased Trading Volume

Jacob Mani, Head of Marketing at Estonia-registered, Indian crypto exchange InstaShift, confirmed that reports regarding the cryptoasset ban “haven’t deterred anyone.” In fact, Mani revealed that InstaShift had recently experienced a surge in crypto trading volumes since widely-used Indian exchange Koinex had been going through scheduled maintenance.

Meanwhile, Varun Sethi, the founder at Blockchain Lawyer, a local firm providing legal guidance on business matters related to cryptossets, believes that the proposed ban on transactions involving cryptocurrencies “is too far from reaching discussion at the upper or lower house of Parliament in India.” He also thinks that Indian media outlets may be “cooking up news.”

“Never Heard” Of Government Officials Completely Banning Crypto

Ajeet Khurana, the CEO of cryptoasset exchange Zebpay, recently stated that he talked to “all of the top stakeholders in the Ministry of Finance, the central bank, the securities regulator and despite them having a certain amount misgiving around crypto, [he has] never heard them talk of banning it.”

Khurana also mentioned:

So it’s very interesting that the people who could ban it have never said they will ban it.