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The Securities and Exchange Commission (SEC) has been a vocal opponent of initial coin offerings (ICO), and now they have taken their concerns one step further by creating a fake ICO website to show investors how easy it is to be scammed.
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The regulator’s “Howey Coins” website calls its ICO an “exclusive opportunity” and has a countdown clock showing that the offer is for a limited time only.
The website also includes other warning signs that it says investors should look out for, including celebrity endorsements, promised returns and a complex explanation of the investment. But, when investors click on the “Buy Coins Now” button they are directed to an SEC webpage that provides investor education tools and tips.
SEC Chairman Jay Clayton issued a statement in December about ICOs noting that, “A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”