"But fraudulent sites also often have red flags that can be dead giveaways if you know what to look for".
The Securities Exchange Commission, a United States regulatory branch charged with investigating fraudulent ICOs, has created their own ICO web page to show potential investment victims the obvious signs of scam offers.
ICOs are a popular but still unregulated way for startups to raise funds which according to the SEC have generated $12 billion in revenue so far in 2018.
The fake site, HoweyCoins.com, is supposed to represent a fraud ICO which even comes with a fake whitepaper and guaranteed investment returns. They are also a proven way for scammers to get to non-savvy investors who want to tap into the rumored high returns possible with cryptocurrency. SEC Chairman Jay Clayton explained, "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".
It's name is in playful reference to the Howey Test, a metric used to determine whether or not an investment is deemed a security under the Securities Act. One of these, @boxingchamp1934, appears to be poking fun at Floyd Mayweather, who endorsed a fraudulent ICO that exit scammed after raising $32mln.
The landing page for the fictitious HoweyCoin is set up in a manner that makes it sound appealing and legitimate. In addition, it has a a pre-sale countdown clock, four tiers of early bird bonuses, and testimonies that promise 1% daily returns, a pledge made by many a fleeting scam.
The US-based regulator built the website to highlight the dangers of investing in ICOs. When clicking through there is even a white page and a list of (fake) celebrity investors but when the Buy Coins Now button is clicked the user is brought to a page outlining the scam.
"HoweyCoins utilize the latest crypto-technology to allow travelers to purchase all segments without these limitations, allowing HoweyCoin users to buy, sell, and trade in a frictionless environment - where they use HoweyCoins to purchase travel OR as a government-backed, freely tradable investment - or both!"
"I encourage investors to do their diligence and ask questions".
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