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"

BitMEX Adds Seychelles, Hong Kong, and Bermuda to List of Restricted Jurisdictions

HDR Global Trading Limited ("HDR"), the Seychelles-based company that operates BitMEX, the world's largest crypto derivatives exchange, has decided to bar people resident in "the jurisdictions in which HDR-affiliated employees and offices are located" from accessing BitMEX.

BitMEX's blog post, which was published on Monday (August 19) says that it has been "working with regulators to help shape the industry, creating the standards that will help it go mainstream," and that it "welcomes" the "increased involvement of regulators with all the major players in the industry."

BitMEX says that, due to this regulatory oversight, it envisions "a new era of legitimacy for cryptocurrency exchanges: a future where market operation standards are clearly stated and maintained, where security is paramount, and where financial reserves are independently and frequently audited."

In order to ensure "the safety of your funds and the stability of the platform," HDR has decided to add Seychelles, Hong Kong, and Bermuda to its list of restricted jurisdictions

Also, BitMEX says that it is "working on independent audits of our Insurance Fund, market making activities, and tradeable contract structure," and intends to "share the results of these processes in the near future."

Featured Image Courtesy of BitMEX