Technology The SEC made a fake cryptocurrency to show you how ICO scams work

01:21  17 may  2018
01:21  17 may  2018 Source:

Bitcoin could soar as high as $64,000 next year, investment research firm Fundstrat predicts

  Bitcoin could soar as high as $64,000 next year, investment research firm Fundstrat predicts The growth of bitcoin "mining" activity could send the cryptocurrency's price as high as $64,000, investment research firm Fundstrat said Thursday. Bitcoin is created through an energy-intensive process known as mining, in which computers receive the cryptocurrency as reward for solving complex mathematical equations. Processing power to guess the solution is known as "hash power," which Fundstrat predicts will grow 350 percent through 2019.

Before we get into outlining how to tell if an ICO is fake , we must define the word scam . This can be seen in the SEC ’s recent public statement on cryptocurrencies and ICO ’s. What makes these Initial Coin Offering scams like Aworker ( WORK ) – ICO , so much easier to launch in

However, unlike IPO rules under SEC , ICOs only need a white paper about a potentiality and a The most popular types include Ponzi schemes, fraud, phishing, initial coin offering ( ICO ) scams , hacking, fake application, and even theft. Source: Fool Me Once: How to Spot a Cryptocurrency Scam .

a close up of a sign© Provided by Engadget

HoweyCoin, a new digital currency, was launched today through a pre-initial coin offering and the team behind it said it would be "the cryptocurrency standard for the travel industry." The HoweyCoin website offers a number of investment levels as well as various discounts depending on when you invest. However, when you click the "Buy Coins Now!" button, it takes you to an SEC website warning you of the strategies used by ICO scammers.

"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," says the site. "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 agency even put together a white paper about its fake coin.

Facebook is reportedly considering its own cryptocurrency

  Facebook is reportedly considering its own cryptocurrency Facebook is reportedly looking into creating its own cryptocurrency. Facebook is reportedly looking into creating its own cryptocurrency. According to Cheddar, it would be a way for the social network's billions of users to make electronic payments on the platform, as well as outside it. There are no real details about the project; all we know is that a source who asked not to be identified told Cheddar, "They are very serious about it.

How do you avoid cryptocurrency scams ? The Securities and Exchanges Commission ( SEC ) is extremely wary of ICOs . In August, 2017, the City of London Police shut down a “ cryptocurrency business” that was cold-calling people to sell fake digital currency.

Will the SEC Rule Ethereum a Security ? Alt Coins. With the recent success of multiple ICO ’s raising millions of dollars it’s no surprise that scam artists and If the whitepaper you are reading just has bold claims with no information backing it up or showing how it works , then that is a major red flag.

The site then goes on to describe a handful of red flags that signal a scam including claims of high, guaranteed returns, celebrity endorsements, claims of SEC compliance, ability to invest with a credit card and pump and dump schemes. Each of those elements were included in the fake HoweyCoin site and the SEC uses them to explain why they should alert potential investors. In regards to pumping and dumping, the SEC site says, "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."

SEC's fake coin offering site shows what scams look like

  SEC's fake coin offering site shows what scams look like looks like a legitimate website letting investors get in on a digital-coin offering at a discounted rate if they act quickly.So who created it? The Securities and Exchange Commission.

During their investigation into The DAO 5 Common Cryptocurrency Scams and How to Avoid Them 5 Common Fake Plastic ICOs . Celebrity endorsements of unethical or shady companies is one thing, outright fraud is quite another. How to Fix Outlook Search When It Isn’t Working Properly.

What are Altcoins. How to Buy Altcoins. Can You Use Altcoins. What is an ICO . Identifying Scams . Here are some of the most common types of scams we’ve seen in the industry: Fake Wallets. Always be sure to do you research and make sure you are dealing with reputable companies first. How to Avoid Cryptocurrency Scams .

The SEC has been cracking down on cryptocurrencies and ICOs lately. It formed a Cyber Unit last year and has brought charges against a number of individuals hosting allegedly fraudulent ICOs. The agency also said it would be looking closely at companies that suddenly pivot to blockchain or cryptocurrencies.

Cryptocurrency stunt to climb Everest reportedly turns deadly .
A publicity stunt by a Ukranian social media network encouraging "crypto enthusiasts" to climb Mt. Everest and bury a hard drive holding $50,000 worth of digital tokens reportedly indirectly led to a man's death, according to the Financial Times.Ukrainian social network ASKfm, which is planning to raise money through an initial coin offering, or ICO, sponsored four people to climb Everest and bury the hard drive holding its digital tokens, which at this point have no proven value.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!