SEC Creates Bogus ICO Site to Teach About Cryptocurrency Fraud
On May 16, 2018, the SEC’s Office of Investor Education and Advocacy launched an educational website meant to demonstrate a fraudulent initial coin offering (ICO). The website, HoweyCoins.com mimics a bogus coin offering touting a too-good-to-be-true investment opportunity. The website features several of the features common to fraudulent offerings, including promises of guaranteed returns, complex jargon, vague explanations and a countdown clock to entice participation.
“Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals,” said Owen Donley, Chief Counsel of the SEC’s Office of Investor Education and Advocacy in a press release announcing the initiative.
ICOs are a new and growing part of the investing landscape. By highlighting the perils associated with these products, the SEC is reinforcing its commitment to investor protection.