Rate this post

Crowdfunding has redefined the world of fundraising, especially in the crypto space. These days, people no longer need to go through the rigorous process and pass the conditions of Venture Capital in order to launch a project. However, the new disruptive opportunity comes with its share of challenges, some of which are scam Initial Coin Offerings.

As much as crowdfunding can enable project owners to put their dreams into reality, these projects have become so common that a week barely passes without launching a new ICO. It becomes increasingly difficult to separate genuine projects from scam ICOs.

New Solutions Coming Up

To curb the menace of fake ICOs, projects such as Wings Platform are in place. Though still under construction, the platform allows members to vet upcoming ICO projects and to forecast the success of certain projects. With such tools in place, investors find it easier to predict the success of a project without much research and without the need for an independent party to verify the authenticity of a project.

All the same, Wings platform is still under construction and many projects may choose to work outside it, especially when they have something sinister behind them. Therefore, it’s important for players in the blockchain community especially new investors to know how to separate genuine projects from scam ICOs.

While there is no way of telling whether a project will be successful, non-authentic projects usually display certain marks that separate them from good ones. With that in mind, the crypto space is such a highly volatile world that investors should ensure that they know what they are doing. Above all, they should remember to invest only what they can afford to lose.

Here are top characteristics of scam ICOs that investors should keep an eye on, to avoid their money going down the drain. Read this article for top five ICOs that can make you millionaires.

#1. No Clear Roadmap

true-earning-com-scam

This is often coupled with unrealistic goals. Start-up projects are naturally ambitious, but when a six-month old project seeks to raise more than a million dollars within three months, it leaves more questions than answers. Genuine projects have realistic goals and an outline of how they intend to raise and utilize the funds.

Counterfeit ICOs promise more than they can deliver. If you come across a blockchain project that promises only profits, seeks to eradicate poverty or global warming, aims to replace the internet, or advocates for a 10,000% profit ratio, think twice. It could be just another fake ICO ready to swindle unsuspecting investors.

#2. No Clear Information on Founders and Advisors

Before you venture into any ICO project, do your research to find out who is behind the project. In many instances, scam ICOs use pictures of people who are not even related to their projects. You can be shocked to find out that people listed as founders and advisors don’t exist anywhere on LinkedIn, Facebook, Twitter or Instagram. This clearly shows that such projects are not authentic.

Another related aspect is the credibility of the founders. Many instances exist out there, in which founders are active and vocal on social media but incapable of implementing what they promise on their whitepaper. You should verify whether what these people say is in tandem with their profiles and achievements. Online forums such as Bitcoin Talk or Reddit can provide reliable information. Find out the people they connect with, who recommend their services, and some of their achievements.

#3. Vague Whitepaper

bitcoin whitepaper

The whitepaper is the playbook of any ICO project. It provides details on the technical aspects of the project, the problems it seeks to solve, and on how the platform works specifically. Usually, the document includes charts, graphs, calculations, simulations, and more.

Scam ICOs are simply laced with exciting buzzwords, which are merely vague claims and empty promises. If the whitepaper discusses no actual tech and only provides high-level descriptions with flashy keywords, then it’s time to move on.

#4. Doctored Escrow

The use of an escrow in a blockchain project instills confidence in the people involved, knowing well that their funds are safe until a deal is complete to their satisfaction. It bestows trust between the buyer and the seller, such that the buyer releases funds only after receiving the agreed product. However, some escrow services are compromised.

It is advisable to ensure that your preferred ICO use only top escrow service. Genuine services require two or more trusted members of the community and a member of the project team to move funds. More importantly, it’s essential to check how the escrow releases funds. Scam ICOs are likely to release all funds towards development while genuine projects have proper planning regarding funds distribution, with specific percentages going to various aspects of project development such as escrow fees and others.

#5. The team behind the Project

The team behind an ICO project works in collaboration with the founders and advisors to implement the goals of the project. It includes the CEO, CTO, CFO, Project manager, and other directors. Always remember to check the team behind a project to ensure that it comprises individuals in good standing in the crypto community. Also, check out other areas in which they are known, as this can shed more light on their background.

Be careful, as scammers may also use pictures of famous personalities on their websites to lure their subjects. You can actually check whether the person whose profile appears on the website is aware of the project. It is also possible to come across anonymous developers, which may not necessarily be a scam. An important step is to find more information behind the anonymous identity from crypto and social forums such as Bitcoin Talk and Reddit. If they have no history or posts on such platforms, then you can stay away.

Genuine and serious projects often have at least one member of their team who is known to the crypto community. It would still help to vet the members carefully to get a good grasp of their background. Scammers are clever. They can simply get famous faces at uifaces.com, come up with some names that are difficult to Google, and throw in a fabricated resume.

Explore Social Profiles

blockchain builds trust in ad delivery

To get a better grasp of the team members, it’s advisable to explore all popular social media platforms and crypto forums and compare the profiles of the team members. Check the age of the account, and whether the profiles are real. Fortunately, some platforms offer handy features to verify membership and to confirm the identity of the members. A good example is Bitcoin Talk, which has a Trust page and other verification features for all its members.

Final Thoughts

Scam ICOs are some of the nagging threats for users of blockchain-based projects. As the industry develops, it’s the hope of participants that efficient tools will emerge to mitigate the vice. For now, keeping an eye on the mentioned marks could help investors escape the snare of fake ICO projects.

Which advice have you found helpful against scam ICOs? Join the conversation over at Telegram (https://t.me/coinstaker)

Read this article for top five ICOs that can make you millionaires.

All Images from CoinStaker Library

Author info

Tony is a writer for the crypto space. He presents cryptocurrency and blockchain topics to the public in a way that he only can. While carefully researched, this article should not be taken as an express investment guide. Do your own research and consult a financial advisor before you invest in cryptocurrency.

xxxnxx
aflamsex
xnxxx
iporn xxx
arab xxnx

Share This