Best Ways To Detect An ICO Scam

Best Ways To Detect An ICO Scam

Best Ways To Detect An ICO Scam

Best Ways To Detect An ICO Scam

Best Ways To Detect An ICO Scam
Best Ways To Detect An ICO Scam
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  • 11 months ago


2019 has proven to be quite successful for the initial industry of coin offers. This is despite the fact that some of the key risks and pitfalls associated with ICO list still remain. With so many new investors joining the risk, the following five best practices should be taken into account at all times. It is urgently necessary to sacrifice the weeds of straw in the ICO industry.


Non-professional language


Any project or company that boasts and wishes to raise funds through an ICO must ensure that the wording on its website is professional. Any website that has flagrant spelling errors or an obvious case of " Engrish" can hint at a possible scam in the first place. While spelling errors can happen to anyone, an initial coin offer that tries to raise millions should never look unprofessional.


Fake Business Address


Companies seeking to adopt transparency will often put their business address on the ICO website or technical documentation. A quick Google Maps search can often yield valuable information about the address and whether or not it can be verified effectively. The rented offices are not necessarily a scam, but an address that does not seem to be able to house a promising company can be a clear indicator that something is wrong.


Fake Advisors


Each initial offer of coins will come with a list of people advising the team at all times. That usually indicates that these individuals have investigated the project at some point and are willing to help it grow accordingly. Although this is an intelligent business approach, there have been numerous problems in this regard over the years. Adding fake advisors to an ICO tends to happen more often than people assume. Always be prepared to personally contact these advisors, or at least see if your Linkedin profile mentions the ICO to verify if they are really associated with the project.


Unsustainable business promises


In the world of cryptocurrencies and initial offers of currencies, not all projects are created equally. There will be many promising companies that are completely legitimate, but there is also a good chance that some of the lists will focus mainly on get-rich-quick schemes. When the latter happens in the world of ICO, unfortunately it will not be the investors who will get rich quickly. Especially in this day of safety versus utility tokens, any promise that seems too good to be true should be avoided.


There is no proof of concept although things are improving in this regard, there are still numerous initial offers of currencies that do not understand that they must offer proof of concept in the first place. Having a technical document is the easy part, since teams can buy them at Fiverr for a cheap price. That alone is not enough to take a project to the legitimate side of the spectrum, mainly because writing something and actually building it are two very different things.


As such, any initial currency offer without proof of concept should not even attempt to raise money. Unfortunately, that's not the way the industry works these days, since most of the initial coin offers will not have a work code before they raise millions of dollars. It is still a great bet to invest in such projects, although there may still be numerous offers that are perfectly fine without a prototype. Careful project research is always a good idea.

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