SEC uses mock website to warn investors about cryptocurrencyMay 17, 2018
Sometime you have to act like a huckster to catch a huckster.
The Securities and Exchange Commission on Wednesday made like an excitable late-night infomercial announcer as it amped up its battle to warn investors against possible too-good-to-be-true crypto-asset come-ons.
“The SEC Has an Opportunity You Won’t Want to Miss: Act Now!” the regulator screamed in an announcement on its site. The SEC also set up a mock initial coin-offering Web site — Howeycoins.com — to show investors just how alluring pitches for bogus ICOs can be.
Like real ICOs, the SEC’s mock site features fake celebrities touting the wonders of the bogus digital assets.
One fake celeb, @boxingchamp1934, endorses the Howeycoin with an enthusiastic, “I’m all about the HoweyCoins — this thing is going to pop at the top!”
“We embrace new technologies, but we also want investors to see what fraud looks like,” SEC Chairman Jay Clayton said, noting that the rapid growth of the ICO market has been “fertile ground for bad actors.”
More than $5 billion had been raised in ICOs in 2017, up from $256 million the year before, according to data from CoinDesk.
Over the last year, regulators have taken a harsher stance on ICOs, which closely resemble initial public offerings of stocks.
The SEC’s fake Web site, HoweyCoins.com, is a wink to the so-called Howey test that emerged from a 1946 Supreme Court ruling to define securities.
Clicking one of the many “Buy Coins Now!” buttons on the mock site directs visitors not to an opportunity to buy but to investor education tools.