The SEC Made A Fake Cryptocurrency To Teach People About Scams

Andrew Krasovitckii/

HoweyCoin is a new digital currency that launched this week, with promises that it would become the best currency for the travel industry to entice buyers. The only problem? It isn't real.

When interested buyers clicked on the "Buy Coins Now!" button, it instead took them to a Securities and Exchange Commission website, letting them know they had been duped.

The website for the faux cryptocurrency is designed to teach potential crypto-traders a lesson about the tactics of scammers.

"We created the bogus site as an educational tool to alert investors to possible fraud involving digital assets like crypto-currencies and coin offerings," the site says.

What to watch out for? Major red flags include claims of high, guaranteed returns, celebrity endorsements and being able to invest using a credit card.

Cryptocurrencies and blockchain are a relatively new form of technology, and government agencies are starting to take notice. The SEC has previously had its eye on cryptocurrency exchanges, hoping to open them up to regulation.

The Federal Trade Commission is also concerned with blockchain scams and the IRS is watching cryptocurrency traders to spot any nefarious activities.

If you want to learn more, the SEC has published a paper on its HoweyCoin scheme.