The Securities and Exchange Commission, worried about people getting ripped off in the boom of public offerings of cryptocurrencies, unveiled an elaborate fake Initial Coin Offering site Wednesday meant to look like one of the real-world scams.
The site advertises a HoweyCoin, a cryptocurrency meant to be used as a medium of exchange in international travel. It even includes a nine-page white paper purporting to establish the value of the coin using business and technology jargon.
But all the links to buy HoweyCoins redirect to a SEC page that contains the bad news: “If you responded to an investment offer like this, you could have been scammed – HoweyCoins are completely fake!”
SEC Chairman Jay Clayton said the Initial Coin Offering market “has provided fertile ground for bad actors to take advantage of our Main Street investors.”
The offerings have allowed for ventures to take investments via cryptocurrencies rather than through securities offerings, which are regulated by the SEC. As cryptocurrencies have penetrated the public consciousness, more scammy offerings have taken place, including ones advertised by celebrities such as Steven Seagal and Floyd Mayweather.
Clayton and other SEC officials have warned investors that they’re at risk of being defrauded,and warned potential coin offerers that regulators are watching them skeptically.
