If you responded to an investment offer like this, you could have been scammed – HoweyCoins are completely fake!
Welcome to Investor.gov, the Securities and Exchange Commission’s site designed for individual investors. We’ve recently seen fraudsters pretending to be involved in blockchain technology, initial coin offerings, and crypto-currencies – when really they are simply operating scams designed to take investors’ hard-earned money. We created the bogus HoweyCoins.com site as an educational tool to alert investors to possible fraud involving digital assets like crypto-currencies and coin offerings.
Fortunately, frauds like these often have a number of “red flags” that can help you tell if the so-called “investment opportunity” is really a scam. Our bogus site is a mash-up of a number of different things we've seen – any particular fraud may be harder to spot than the red flags here. Here are some of the signs of fraud that are on the HoweyCoins site – we hope reviewing these may help you recognize a real fraud in the future!
RED FLAG: CLAIMS OF HIGH, GUARANTEED RETURNS
- “HoweyCoins is the newest and only coin offering that captures the magic of coin trading profits AND the excitement and guaranteed returns.”
- We anticipate OVER 1% daily returns, with DOUBLE 2% returns on Tier 1 investors in pre-ICO stage secured purchases.
- We also forecast a minimum growth rate of between 7% to 15% annualized, making HoweyCoins attractive for long-term investment. In addition, HoweyCoins can serve as a GUARANTEED hedge against inflation and market loss.
Every investment carries some degree of risk, which is reflected in the rate of return you can expect to receive. High returns entail high risks, possibly including a total loss on the investments. Most fraudsters spend a lot of time trying to convince investors that extremely high returns are “guaranteed” or “can’t miss.”
RED FLAG: CELEBRITY ENDORSMENTS
- CHECK OUT THESE MESSAGES FROM OUR CELEBRITY PROMOTERS.
- “I’m all about HoweyCoins – this thing is going to pop at the top!” @boxingchamp1934 (John “Champ” Smith, boxer).
Celebrities, from movie stars to professional athletes, can be found on TV, radio, and social media endorsing a wide variety of products and services – sometimes including crypto-currencies and coin offerings. A celebrity endorsement does not mean that an investment is legitimate or that it is appropriate for all investors. It is never a good idea to make an investment decision just because someone famous says a product or service is a good investment.
RED FLAG: CLAIMS OF “SEC-COMPLIANT”
- HoweyCoins will trade on an SEC-compliant exchange where you can buy and sell them for profit.
The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange. Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select.
RED FLAG: INVESTING WITH A CREDIT CARD
- Investors can purchase HoweyCoins with any major credit card.
Investors should understand that most licensed and registered investment firms do not allow their customers to use credit cards to buy investments or to fund an investment account. We urge investors to work only with a licensed or registered investment professional or firm and not attempt to use a credit card to fund investments.
RED FLAG: PUMP AND DUMP SCAMS
- Special pre—ICO pump special: once in, we will provide expert timing advice to make sure Tier 1 and limited offer Tier 2 participants maximize immediate gains with a pre-planned pump to occur shortly after the pre-ICO phase ends. Our past two pumps have doubled value for the period immediately after the pump for returns of over 225%.
In a pump and dump scheme, fraudsters typically spread false or misleading information to create a buying frenzy that will “pump” up the price of a stock and then “dump” shares of the stock by selling their own shares at the inflated price. Once the fraudsters dump their shares and stop hyping the stock, the stock price typically falls and investors lose money.
For more information about digital assets and fraud generally, visit the resources below.
- Spotlight on ICOs and Digital Assets
- Chairman Jay Clayton’s Statement on Cryptocurrencies and Initial Coin Offerings
- Investor Alert: Public Companies Making ICO-Related Claims
- Investor Bulletin: Initial Coin Offerings
- Investor Alert: Bitcoin and Other Virtual Currency-Related Investments
- Investor Alert: Ponzi Schemes Using Virtual Currencies
- Check Out Your Investment Professional
- Investor Alert: Celebrity Endorsements
- Bitcoin Basics
- Introduction to Virtual Currency
- Customer Advisory: Beware Virtual Currency Pump-And-Dump Schemes
- Customer Advisory: Beware “IRS-Approved” Virtual Currency IRAs
- CFTC Backgrounder on Oversight of and Approach to Virtual Currency Futures Markets
- A CFTC Primer on Virtual Currencies
- Customer Advisory: Understand the Risks of Virtual Currency Trading
- CFTC Backgrounder on Self-Certified Contracts for Bitcoin Products
The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.