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SEC Introduces Fake ICO Site to Increase Awareness of Fraudulent ICOs

The Office of Investor Education and Advocacy at the United States Securities and Exchange Commission (SEC) has introduced a fake initial coin offering (ICO) website, with the goal of increasing awareness of the common warning signs of deceitful ICOs and to promote investor education.

The mock website HoweyCoins.com marks a common example of a fraud ICO website that flaunts an “all too good to be true investment opportunity.” The website also has details like an ambiguous white paper, assured returns claims, endorsements from celebrities, and a countdown clock that is “quickly running out on the deal of a lifetime.”

When a user clicks on the “Buy Coins Now,” they land in the website, Investor.gov, which was made by the SEC to help investors evade fraud. The site cautions that if users would have engaged the investment offer made by HoweyCoins, they “could have been scammed.”

SEC Chairman Jay Clayton stressed that the agency backs the proliferation of new technologies, but it also urges investors to arm themselves with the right information and see from a mile away what fraudulent offers look like:

“We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud. Distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. I encourage investors to do their diligence and ask questions,” said Clayton.

Owen Donley, the Chief Counsel of the SEC’s Office of Investor Education and Advocacy, said that a duplicitous ICO website can be established in no time, which says a lot about how easy and fast it can be to initiate another scam offer.

“Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals,” Donley said.

Earlier this week, three co-founders of cryptocurrency startup Centra Tech have been formally indicted for operating a fraudulent ICO. Centra Tech’s ICO raised $32 million from investors in 2017. The Florida-based founders hoodwinked investors by claiming that they had collaborated with Visa and Mastercard to issue virtual currency debit cards.

Last month, SEC Commissioner Robert Jackson criticized of ICOs in general, saying that investors “are having a hard time telling the difference between investments and fraud.” He also went on to state that the ICO market is an ideal example of what an unregulated securities market would look like.

The post SEC Introduces Fake ICO Site to Increase Awareness of Fraudulent ICOs appeared first on CryptalNews | The Latest in Bitcoin and Crypto Currencies News.
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