The Securities and Exchange Commission (SEC) of the United States decided to demonstrate the risks of crypto assets and primary placements of tokens (ICO) in the most graphic way – on Wednesday the regulator launched a fake site that advertised the nonexistent HoweyCoin tokens.
As noted in the statement on the SEC official website, many ICOs are likely to be fraudulent transactions. At the same time, the volume of funds raised through ICO has already exceeded $ 12 billion.
It is generally accepted that the SEC for all 84 years of its existence has not learned advanced forms of interaction with the general public, writes The Wall Street Journal. However, trying to talk about the ICO on a concrete example and in simple language may prove to be more successful than all the previous activities of the commission.
The SEC press release is in the form of an attractive investment proposal, its headline: “The SEC has an opportunity that you do not want to miss.” Act now! ”
The SEC site, howeycoins.com, allegedly dedicated to investing in premium tourism, also quite convincingly imitates the pages of real ICOs, fraudulent and not very. However, the button “Buy Tokens” will not lead to rapid enrichment, but to warnings and explanations of regulators. Clicking on it, the user goes to the official site of investor.gov, where the SEC explains how to recognize the fraud sale attempt.
According to Commission Chairman Jay Clayton, a sure sign is the promise of incredible revenue and huge discounts. “Buy at a 25% discount today, because tomorrow the full price will already be in effect? Yes, you are kidding!”, He said at a conference on venture capital, introducing the new SEC initiative.
The head of the SEC added that the pseudo-ICO site was created by the regulator staff with minimal time and other resources. “And it shows how little effort it takes to bring a token to the market,” he said.
The very name of HoweyCoin contains a hint of one of the most important precedents in the field of investment regulation – the SEC case against Howey. Formulated by the US Supreme Court, “Howey criterion” (Howey Test) for more than 70 years helping to establish whether the transaction definition of “investment contracts” under US law. If the answer is positive, then such transactions are considered securities, and they are subject to all relevant requirements, including state registration and disclosure.
The SEC has not yet decided definitively whether all ICOs should be considered securities placement but has repeatedly stated that, in case of such transactions, standard requirements must be met. Including potential investors should have access to financial statements, audited by auditors, a description of the activities and associated risks.