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SEC has launched a spoof Initial Coin Offering (ICO) website in a bid to educate and warn investors of the dangers posed by the ICO Wild West.
As interest in cryptocurrencies continues to expand, this has sparked a new industry. When legitimate, ICOs are designed to give startups and -- generally -- cryptocurrency-related projects a cash injection and a chance to get off the ground without appealing to angel investors or traditional financial institutions.
ICOs are usually offered for a fixed time, and in return for investors handing over standard cryptocurrencies including Bitcoin (BTC) and Ethereum (ETH), they are given a form of branded cryptocurrency token.
However, the ICO scene is full to the brim with exit scams, data breaches, and criminal schemes which can leave investors seriously out of pocket.
SEC is currently pursuing a dozen companies[1] for allegedly conducting ICO exit scams. However, the US agency is not content with dealing with fraudulent ICOs after the fact and instead hopes to educate investors to prevent such scams being successful in the first place.
The US Securities and Exchange Commission (SEC) said on Wednesday[2] that the new spoof website, dubbed HoweyCoins[3], is a mock ICO designed to "educate investors about what to look for before they invest in a scam."
SEC's website bears all the hallmarks of language and graphics used to entice investors to part with their cash, including a large countdown timer, promises to partner with established companies in other industries, promises to register with SEC itself, and, of course, high returns on original investments.
HoweyCoins says it combines the "blockchain and travel" to offer ICO participants massive discounts on travel expenses. The fake