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.US CEO: US Gov. Should Use Stablecoin for Coronavirus Payments

  • Binance.US CEO Catherine Coley says the US government should use stablecoins to issue emergency coronavirus payments.
  • Coley argues digital currencies avoid the need for people to visit banks amidst the ongoing quarantine. 

The chief executive officer (CEO) for cryptocurrency exchange BInance.US says the government should turn to stablecoins for issuing coronavirus emergency payments. 

Catherine Coley, who previously served as head of XRP institutional liquidity at Ripple, published an op-ed on Mar. 22 arguing the government should use stablecoins for distributing emergency relief. 

Coley says a digital currency would allow people to receive aid without having to deliver the payments to a physical location, thereby increasing the risk of contracting or spreading the virus. 

She said, 

The government needs to look for ways to innovate the antiquated process of distributing checks by mail. In the interests of speed and safety, why not consider sending the stimulus in the form of stablecoins as a means to verify the transfer of assets?

Coley highlighted the immediate impact of issuing a digital currency, 

Because stablecoins can be distributed digitally, Americans would have immediate access to their funds, alleviating the need to spend hours at a bank to cash a check while removing oneself from a self-imposed quarantine.

The Binance.US CEO admitted there would be significant pushback to the use of a digital currency, due to a lack of understanding of crypto-assets, but that education could go hand-in-hand with the distribution. 

Featured Image Credit: Photo via Pixabay.com