SEC’S OWN Initial Coin Offering, HoweyCoins

Heard about the hot new cryptocurrency associated with luxury travel called HoweyCoins?

However, this ICO is designed to give you a better understanding of how crypto works and a warning about scams and nothing more.

HoweyCoins is a creation of the SEC’s office of investor education and advocacy in an effort to intimate people about the risks and consequences of investing in cryptocurrencies.

The objective of the venture is to familiarize investing rookies with signs of fraud before it’s too late. SEC Chairman, Jay Clayton in a statement said that:

“The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our main street investors. 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.”

The website, HoweyCoins.com, imitates a normal coin offering, declaring that, “Combining the two most growth-oriented segments of the digital economy — blockchain technology and travel, HoweyCoin is the newest and only coin offering that captures the magic of coin trading profits AND the excitement and guaranteed returns of the travel industry.”

Clicking on the “Buy Coins Now” button will lead to prepared investor education tools from the SEC and other financial regulators.

In a statement to the press, Owen Donley III, chief counsel of the SEC’s office of investor education and advocacy said that:

“Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phoney deals. But fraudulent sites also often have red flags that can be dead giveaways, if you know what to look for.”

HoweyCoins website hits on several indicative signs of a scam like; Guaranteed returns. White paper with a wordy-but-vague explanation of the investment; An anxiety-inducing countdown clock, Celebrity endorsements.

While these points don’t necessarily imply the offering is a sham, it’s wise to be aware and distrustful.

The website’s name, HoweyCoins, is a bit of an investor inside joke. The name is a reference to the Howey test that’s used by law enforcement and regulators to determine whether a transaction is an investment contract.

In a landmark 1946 US Supreme Court decision, SEC v. W.J. Howey Co., the court held that a transaction is an investment contract or security, if, “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

Investors need to beware and be informed. That the SEC was able to build the HoweyCoins website in very little time, depicting how very easy it is for someone to create a scam opportunity. A free and reliable way to ensure your money is safe is to research investments and the persons who sell them and to visit its consumer website, Investor.gov, prior to investing.