The SEC set up a website, HoweyCoins.com, that mimics a bogus coin offering to educate investors about what to look for before they invest in a scam. Anyone who clicks on “Buy Coins Now” will be led instead to investor education tools and tips from the SEC and other financial regulators, it said in a release.
“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,”said SEC Chairman Jay Clayton. “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. I encourage investors to do their diligence and ask questions.”
“The website features several of the enticements that are common to fraudulent offerings, including a white paper with a complex yet vague explanation of the investment opportunity,” the release added. Of course, complex but vague descriptions are pretty common in both finance and technology. However the website also has promises of guaranteed returns, a clear violation of both law and common sense, and a countdown clock that shows time is quickly running out on the deal of a lifetime.