“Bringing together the two most expansion-oriented segments of the digital economy- blockchain technology and travel-HoweyCoin is the latest and only coin offering capturing the magic of coin trading profits and enthusiasm and guaranteed returns of the travel industry.”
Sounds fishy? Well, it is. HoweyCoins is indeed a fake. It has been created by the SEC to raise awareness of scammers and malpractice among ICO token sales.
Anyone clicking on the ‘token sale’ button gets redirected to a stern investor.gov page which doesn’t offer the gains promised but instead provides best practices and red flags for investors on blockchain fraudsters. These include:
- False claims of high and guaranteed returns: “Most fraudsters spend maximum time trying to convince investors of exceptionally high returns which are ‘guaranteed’ and ‘can’t be missed,’ as quoted by SEC.
- Celebrity endorsements: “It is never a great idea to finalize an investment decision just because someone famous recommends that product or service as a good investment.”
- Credit card investment: “Most licensed and registered investment firms do not allow their customers to use credit cards to buy investments or to fund an investment account.
Other issues on which the Commision throws light on it bogus website include the global whitepaper-”a convoluted yet ambiguous explanation of the investment opportunity”-as well as hoax scams promising SEC compliance.
This can be again another great shocker as many fake companies reutilize old stock photos and invent more employees than in actuality. However, a google reverse image search can rapidly weed out those bad actors.
“We readily embrace new technologies, but we also want to the investors to be aware of what fraud looks like. Thus we created this educational site, with many of the classic warning signs of fraud,” said Jay Clayton, SEC chairman.
Undoubtedly distributed ledger technology can make the capital raising process more efficient, but it is critical that promoters and issuers make ensure that security laws are adhered to completely.