
HoweyCoins – An educational tool to alert investors to possible fraud - ChrisArchitect
https://www.howeycoins.com/index.html
======
moeadham
I really want to meet the team at the SEC who put this together. The level of
trolling the ICO community is incredible.

Not sure if anyone else opened the white paper, but it is acutally better than
most of the ICO papers I read in general.

There are gems like:

> "Upon a successful ICO, the nondisclosure agreements terminate and we will
> be able to disclose the largest network of travel partners"

> "we expect a bidding war to increase HoweyCoins valuations by severalfold."

~~~
will_brown
In its hubris the SEC forgot one thing, the most important thing, the only
thing...yes the SEC knows the law well, but this is smart contracts, Case
Law/precedent/stare decisis don’t apply to ICOs... _the code is the law_

~~~
tommorris
Good luck arguing that novel legal theory when in front of a judge on a fraud
or tax evasion trial.

~~~
will_brown
It’s sarcasm, I forgot the doesn’t exist on HN. My post history shows from day
one I called DAO snake oil, and code is Law bullshit, and shows how much crap
I took for that here on HN. But if the SEc can have a sense of humor about it
why can’t I? They really did miss an opportunity to use the smart contract
marketing though...

------
rzimmerman
Probably named after the Howey Test ([https://consumer.findlaw.com/securities-
law/what-is-the-howe...](https://consumer.findlaw.com/securities-law/what-is-
the-howey-test.html)) which is pretty clever.

~~~
setr
Isn't it more likely derived from honeypot

~~~
true_religion
Then they might have called it _Honey_ Coins. That the SEC named it Howey,
after a test that determines if something is a security---thus actually under
SEC regulation---seems way more likely.

------
tyrust
Pretty great. And complete with a whitepaper that actually makes a seemingly
reasonable business argument while ignoring tech.

[https://www.investor.gov/howeycoins](https://www.investor.gov/howeycoins) has
the explanation

------
m52go
I think it's hilarious that one of their "celebrity promoters" calls the coin
a bubble right on their front page:

> I’m all about HoweyCoins – this thing is going to pop at the top!

~~~
tomphoolery
Hey now, @boxingchamp1934 has never led me astray before...

~~~
ggg9990
I think it’s a jab at Floyd Mayweather.

------
tzm
HoweyCoin is fake, but is it? And, that's how Dogecoin got started.

~~~
ddtaylor
I met the guy who made DOGE at a conference in Portland and he was hilariously
apologetic to everyone about having accidentally made (at the time) one of the
most popular coins.

~~~
hsljekskfh
there’s a great npr interview with him. apparently he never owned more than
$75 worth of doge at today’s value.

~~~
ClassyJacket
I made a genuine small profit mining Dogecoin back in the day. Between that
and Litecoin I was able to make my two 400$ HD7970s pay for themselves, even
after accounting for electricity.

Edit: Wanted to add that the success (Well, maybe not 'success', but
popularity) of Dogecoin should highlight the value of making things
accessible. Not everything needs to be a silly meme, but making things fun and
building a community can make a huge difference.

~~~
Viper007Bond
My 3 months of mining back in the day (aka heating my apartment with video
cards instead of electric heaters) netted me about $4000 a few months ago. I
found it hilarious.

~~~
dabockster
All I can say is wow.

~~~
api
Such mine. Much electric bill.

------
cornoffering
Hmm, it seems like this fake ICO will compete with our fake ICO
([https://initialcornoffering.com](https://initialcornoffering.com)) for the
same "investors." I guess we need celebrity endorsements to make the front
page of HN though?

------
pelagicdev
They're going want to optimize those 8k res images down at the bottom of the
page if they want to actually sell some of those coins.

~~~
true_religion
They're just doing their part to waste energy and bandwidth, in the same vein
as a real ICO would.

------
a-dub
The real question is, who are those people? They are really smirking hard. I
bet they're SEC employees, the images have real first names on them (that
don't match their fictitious names) which would seem to indicate they're not
just stock photos.

I can imagine the email to the office now. That would be the coolest thing
ever... "we need volunteers, must be reasonably photogenic and capable of
producing a foreboding smirk...."

~~~
aflagatopamoon
Couldn't find those stock images anywhere else. Some names are unique enough
to be mistaken for someone legit.

The site was announced today. The whitepaper was created on 2018-04-11 and the
site was registered on 2018-03-08. So they probably spend a few months and
10k's $ on this scam project.

This project only works "PR"-wise, because it is posted on social media. No
unsuspecting investor is going to happen upon on this site and change his/her
behavior and be "educated". That's a deluded pipe dream by out-of-touch no-
coin government employees.

This is 1990's Microsoft level of lame.

~~~
kbar13
ok like regardless of whether or not it educated me i had a pretty good
chuckle. they're good memes brent.

~~~
SimbaOnSteroids
brint

------
paulpauper
So if ICO frauds are so easy why aren't there more of them> The answer is,
promoting an ICO is extremely difficult and expensive. The market is not that
big

~~~
fragsworth
A lot of them are combination money-laundering schemes and scams. Someone who
stole a bunch of shitcoins wants to "clean them up", so they create an ICO and
buy their ICO-coins with stolen shitcoins.

By doing this, they also inflate the "market" value of their ICO, which leads
to increased popularity and others notice and throw some money in.

It's not clear to me what proportion of ICOs are money-laundering vs. real
purchases, but I suspect it is quite high.

~~~
api
Don't forget flight capital from China, Russia, etc.

~~~
bitcoinbutter
The capital flight occurs when people buy the Ethereum or Bitcoin which they
need to purchase the ICO.

------
snissn
I just saw and clicked an ad for this ICO and it looks just like Howey Coin's
site - [https://icerockmining.io/en.html](https://icerockmining.io/en.html) (I
don't know whether this is a scam or not, i don't recommend investing or
avoiding it, I just wanted to point out how similar the website looks to the
howeycoins website! DYOR) (Being overly neutral for its own sake here, but it
seems very questionable)

~~~
phs318u
I'm surprised there isn't already a DIY ICO generator on GitHub.

~~~
lozaning
I'll do you own better:
[https://crapcoin.solutions/](https://crapcoin.solutions/)

Found it on here a couple days, maybe weeks back.

------
apo
The SEC has missed the point entirely.

Savvy investors want proof that the ICO organizer is running a scam, and that
it has legs. The SEC has merely created a playbook, not a fraud deterrent.

The ICO scam is a genre of investor literature. As such certain obligatory
signs and conventions will be present:

\- the countdown (made its first big appearance with the Ethereum crowdsale)

\- use of the term "blockchain technology" in the opening paragraph

\- combining "blockchain technology" with a secondary domain (e.g. Travel)

\- the more non-obvious the match between "blockchain technology" and the
secondary domain, the better

\- focus on benefits, not features

\- describe a problem everyone recognizes (travel is expensive)

\- state the size of the market for solutions ($1.5 trillion)

\- management team headshots

\- appeal to authority/celebrity

\- ROI forecast

\- a whitepaper that carefully avoids revealing how the token fulfills the
promises made in the marketing material

Ticking all the boxes lets the ICO operator reassure the prospective investor
that all steps have been taken to ensure future buyers of the token.

Think of it as proof-of-future-bagholder (PoFB). A rinky-dink ICO that can't
bring itself to lay the fertilizer sufficiently high will be in no position to
keep investors coming in after the crowdsale ends.

~~~
willsinclair
I think the site is supposed to be more of a PSA for non-savvy investors
rather than a fraud deterrent.

------
nickpeterson
So, I think what the SEC is doing, is forcing me to actually create
HoweyCoins...

------
geraldbauer
FYI: At Bits & Blocks Press I've also put together educational booklets to
alert invstors. See Best of Bitcoin Maximalist - Scammers, Morons, Clowns,
Shills & BagHODLers - Inside The New New Crypto Ponzi Economics [1] or Crypto
Facts - Decentralize Payments - Efficient, Low Cost, Fair, Clean - True or
False? [2] or Get Rich Quick "Business Blockchain" Bible - The Secrets of Free
Easy Money [3]

[1]: [https://bitsblocks.github.io/bitcoin-
maximalist](https://bitsblocks.github.io/bitcoin-maximalist) [2]:
[https://bitsblocks.github.io/crypto-
facts](https://bitsblocks.github.io/crypto-facts) [3]:
[https://bitsblocks.github.io/get-rich-quick-
bible](https://bitsblocks.github.io/get-rich-quick-bible)

------
shp0ngle
Don't make pages like this.

Just go after existing ICOs. Arrest people, prosecute people, go after people.

If it's China or whatever, collaborate with China. Chinese citizens are
scammed as much as US ones.

Just arrest all the ICO scammers. Arrest the ERC token pumpers, arrest the
exchanges.

~~~
oliveshell
The effort it takes to make a site like this is a tiny fraction of that
involved in "going after" dozens of dodgy ICOs.

Making this site couldn't possibly have impeded them in that task in any way
that isn't grossly outweighed by the public good of its educational value.

~~~
shp0ngle
True.

------
gowld
It's a nice idea, but the meat of the site
([https://www.investor.gov/howeycoins](https://www.investor.gov/howeycoins))
is far too complicated for an ICO investor to read and understand.

~~~
s73v3r_
If that's the case, then perhaps they shouldn't be investing in ICOs?

~~~
TremendousJudge
yeah, that's what they want to achieve

------
Danski0
Very similar concept as the scam Bitair (and many others of course) -
[https://bitair.io/](https://bitair.io/)

------
stevedekorte
Fake ICOs are a great way to teach people about financial scams, including the
one's run by the existing central banking system:

[https://medium.com/@stevedekorte/fiatcoin-pre-sale-
announcem...](https://medium.com/@stevedekorte/fiatcoin-pre-sale-
announcement-e2cf5a361629)

------
DINKDINK
Related: PonzICO [https://ponzico.win/](https://ponzico.win/)

~~~
chimeracoder
Also related: PonziCoin:
[https://ponzicoin.co/home.html](https://ponzicoin.co/home.html)

------
Keeeeeeeks
This wasn't that great; no ICO accepts credit card purchases because that
would imply buyer protections

~~~
hrrsn
They explain this as a red flag on the SEC page.
[https://www.investor.gov/howeycoins](https://www.investor.gov/howeycoins)

> 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.

------
soared
Cached

[https://webcache.googleusercontent.com/search?q=cache:jJBx3M...](https://webcache.googleusercontent.com/search?q=cache:jJBx3MPekKcJ:https://www.howeycoins.com/+&cd=1&hl=en&ct=clnk&gl=us)

------
vishakh82
We already did something similar -
[http://securitiesandexchangecoin.tech/](http://securitiesandexchangecoin.tech/)!
SECS token - the first attempt by the government to bring blockchains to
regulation!

------
Geee
The problem (of overvaluations) is that there aren't enough ICOs. When there's
more of them inflation will naturally devalue the scammiest of them. The best
days for (scam-)ICOs are already over.

------
Operyl
I'm curious that they used Hover as a domain registrar, and Heroku to host the
site. I have to wonder how much hell someone had to go through to get those
two as approved vendors.

~~~
freedomben
Having worked in government in the past, I wouldn't be surprised at all if
Heroku and Hover _aren 't_ approved vendors. Somebody is probably just paying
for it out of pocket. Not worth the bureaucratic headache to get them to pay
for $20 worth of stuff.

------
burritofanatic
Downloaded the whitepaper hoping it would involve oranges. It didn't - still
awesome!

------
yuvalkarmi
Andddd... crashed. Hope this comes back soon -- curious to see it!

~~~
rdiddly
Still timing out at 1:05 PM PDT. I guess they weren't ready for the HN front
page treatment...

~~~
ct520
40mb per user session.. that could add up.

------
cwkoss
> Investors can purchase HoweyCoins with any major credit card

Either this is a major fraud risk, or this isn't really a cryptocurrency. Is
the HoweyCoin ledger reversible and centralized?

EDIT: derp, it's a joke

------
quickthrower2
Now we just need one for pyramid schemes.

------
ct520
Much wow only 2.7 mins to load at 38.2MB transfer. Feel sorry for whoever
paying for bandwidth

~~~
beager
It's a .gov, so US taxpayers are paying for the bandwidth.

------
tobyhinloopen
This is a joke right?

~~~
kizer
Yes - the SEC (government agency that regulates securities) is behind it. It's
supposed to teach people a lesson.

------
kylegalbraith
I feel confused.

------
omarforgotpwd
We anticipate returns of 1% a day? How can you try and anticipate the price of
a cryptocurrency. Any investor who knows what they're doing turned around and
ran away when they read that line.

~~~
wyldfire
> Any investor who knows what they're doing

But they're not the intended audience, right?

------
ddtaylor
To be fair to many ICOs they don't make most of these claims. They are cherry
picking the worst of the worst and presenting a straw man. I agree the crypto
currency space is messed up but I think this could be done better.

~~~
spookthesunset
> To be fair to many ICOs they don't make most of these claims.

"Many" == 99%. There are no non-scam ICO's.... even the ones that aren't
intentionally run as scams are, ultimately, scams.

ICO's don't invest in a company, they "invest" in a brand new "currency" that
somehow magically reflects the value of the "company" that created them. Why
anybody would buy into this is beyond me...

~~~
sanxiyn
There are security token ICOs which are not utility token ICOs.

~~~
spookthesunset
> There are security token ICOs which are not utility token ICOs.

Ah so securities fraud instead of just plan vanilla fraud?

~~~
sanxiyn
It depends on jurisdiction, but yes, as I understand unregistered security
offering is illegal in US.

~~~
spookthesunset
It’s illegal in every country with a developed system of securities law for a
good reason.

All ICO’s are scams. Period.

