Act now and join one of the hottest crypto deals of the year—Howeycoins!
This Initial Coin Offering plus a travel network won’t last for long so act now while you still can.
But, here’s the problem: HoweyCoins does not exist. It’s a scam website created by the Securities and Exchange Commission (SEC), to teach investors on the risks involved in cryptocurrency investment scams.
HoweyCoins: the SEC’s biggest prank
It looks like a real website. There’s an Initial Coin Offering, a white paper, a full reference of the team behind the company, and even celebrity endorsements! Unfortunately, it’s all FAKE.
The website exhibits several characteristics unique to fraudulent ICOs, including a white paper with a complicated yet unclear explanation of the investment opportunity, promises of guaranteed profits, and a countdown clock that says you’re running out on the deal of a lifetime.
Although ICOs, just like any other investment opportunity, can certainly be legitimate, some, however, are not.
Below are five red flags you need to look out for to prevent falling into the trap set up by crypto scam artists.
FIVE COMMON RED FLAGS TO LOOK FOR IN CRYPTO SCAMS
- Promises of High, Guaranteed Returns
Any form of investment carries a certain degree of risk, which is shown in the rate of return you are expected to receive. High returns usually involve higher risks, including the possibility of losing your entire investment.
Most scammers spend a great deal of time convincing investors that high returns are “100% guaranteed” or “can’t miss”.
The truth is no investment guarantees high returns without any form of risk.
- Celebrity Endorsements
You may have seen celebrities endorsing cryptocurrency investment offerings, but it doesn’t always equate to a legit or legal investment.
This should already go without saying, but just because someone famous says it’s a good idea to invest on something doesn’t always mean you should take the risk and jump into the bandwagon. You need to do your homework and do enough research to make sure you’re not falling into yet another scam.
- Claims of being “SEC-Compliant”
According to the SEC, many online trading platforms claim to be “SEC-registered” and regulated when in fact they are not.
Many platforms even label themselves as “exchanges,” which gives the impression that they are regulated or meet the regulatory standards of a national securities exchange.
- Allows You to Invest With a Credit Card
Do you remember the last time you made an investment using a credit card? You probably have never tried, right?
This is because majority of licensed and registered investment firms do not allow customers to use credit cards to purchase investments or sponsor an investment account.
Investors are encouraged to work with licensed or registered investment professionals or companies when funding investments.
- “Pump and Dump” Schemes
In a classic pump-and-dump scam, scammers usually spread false or confusing information that will create a buying frenzy that would “pump” up the price of a stock then “dump” shares of the stock by selling them at an exaggerated price.
After the scammers sell their shares and stop building hype on the stock, the stock eventually loses its value and investors lose their money.
To get more info on how you can protect yourself from investment scams, visit investor.gov