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ICO is the abbreviation of Initial Coin Offering. It means that someone offers investors some units of a new cryptocurrency or crypto-token in exchange against cryptocurrencies like Bitcoin or Ethereum. Since 2013 ICOs are often used to fund the development of new cryptocurrencies. The pre-created token can be easily sold and traded on all cryptocurrency exchanges if there is demand for them.

Advantages of ICO:
1. Non-lengthy listing process
2. Low listing cost and yearly maintenance
3. Access to global liquidity

Disadvantages of ICO:
1. No due diligence process
2. Lack of regulations

There are many good ICOs out there.
Its an excellent platform for those who are holding a million dollar idea to expand and execute with funds yet improving the economy with investors. However what its lacking is the due diligence we see in IPOs. New developed platforms definitely lures scammers into the game, but with caution/practice due diligence like finding out more about the whitepaper, development team, address of the company, analyzing the project will lower the risk of being victimized.

Tips to identify and analyse a good ICO:

1. Whitepaper
Read up the whitepaper, spot for any discrepancies or any thing that doesn't make sense. Identify the key idea of the project and analyse if the idea will work out or make any sense.

2. Founder Team
Do some research on the founder team members, spot if their names are short names like "Tony" compared to "Tony Jim Rodriguez". Many ICO scams out there uses very short names.

3. Contact and Address
Practice due diligence, research and look through the contact numbers and address of the project, check if they are using a legit one.

4. Read up forums
Usually scams might be identified by other victims, do a thorough research on the project you wish to participate. You might find some tell tail signs of a scam.

All in all, practice due diligence to avoid being the next victim.

Thanks for the guide!

If some projects collect shit amount of million dollars, I think they are somehow scam or we can say that they are not doing good job. We will learn soon that money is not everything thanks to the these projects.

please also add 1. everything with "e" like eETH, eBCH, eGOLD and anything is scam and only for quick cash.

I think one important thing that very few check is "How are they going to make revenue?" . Because unless these companies start making profits they will run out of cash and go bankrupt. We also need to check what the tokens are actually used for? Do they have an important utility in the ecosystem? or these are just fund raising cash grab tokens?

i guess the need to have a figure to stand in as endorsement or guarantor, or any means to force them to practice due diligence might work out

Thanks for sharing this great information op. This will really help a lot of newbies here in this forum that wants to get their hands on different kinds of alternative coins. This will really help them from getting scammed.

But let me also share my way of determining scams or shitcoins. It is very easy. I just go and search about the devs and their team. To save some time because if the devs aren’t good, I don’t go and read the whitepaper and erase the ICO on my list. But if the devs are good, then I proceed reading more about the certain ICO. That is my way of filtering ICOs.

Thank you for this information. I've been searching on some blogs and articles on how to distinguish a legit and scam ICO. What you've shared is almost the same on what i've read. Now, whenever i join an ICO i search on the dev team and make some research about them. I think that is the simplest way to know if an ICO is scam.

thanks a lot man I'm really eagr to know about ICO

All of your criteria have flaws.  They have all failed to determine if the project will turn out to be a scam or crap.

The most reliable criteria is whether the team has already built something that you can use today.

Read:

There are 3 Kinds of ICOs - Protect Yourself
https://bitcointalk.org/index.php?topic=2243157

Yes this always has been my own process of identifying the good ICO. Always keep watching for the whitepaper, roadmap, team members and more over I will check the marketing strategy and the investment they are doing from their own pockets. This ensures that they are very serious about the money and thus they actually care for it. So in general your theory is nice one. Thanks for sharing.

There is lots of Ico coming up with scam intention only they make awesome website and good white paper finally they will show fake token sale record . Before investing in Ico check the team and concept of Ico and solution providing .

Good one OP! This is very necessary for people who have not really been doing due diligence before and always end up just investing in a project because they like how it sounds. This lists are very paramount to look for in any ICO to enable one kick against any scam ICO. However, it will still end up to ICOs being regulated and I really do not fancy it as laziness of people to get it right apparently will lead to this. Everything still balls down on the team in question anyway, they are always my main target in any ICO.

Most people that get that coin will dump it once it hits an exchange.
I wouldn't want to be the one spending Bitcoin to purchase it.

The statement that you wrote is so useful, especially to investors who are fairly new into ICOs. I am glad that the short article advice investors on measures to take before actually investing in any ICO.

The problem that most investors have is lack of reading or researching, whenever a new project arise, they quickly jump in without even understanding the whitepaper, and this leads to most investors getting scammed. I am glad that you actually took your time to write this short article to inform new investors on measures they can take before participating in ICOs.

Good explained,everyone should aware from scam so that investment can be safe.

All ICO are not scam. some of them are scam, but it is mainly marketing
When you join a ICO first you need to study and have a look at the project whitepaper, roadmap, ERC20 token approval, project future planing, it's root or platform etc, check the comunity the design and the team
Then you will accept this project ICO or not

Well this has been a major problem. We are actually unable to find an ICO which is not a scam among hundreds of ICO's . So basically the owners of ICO has to choose a good manager to promote it and so that people believe in it and the owners find many investors.

Thanks for the article op!
I agree with you, most people don't like to read the Whitepaper because it's long. There's a bunch of information in the Whitepaper.

Not all ICOs are scams, but there are a lot of scam ICOs.

You need to look at the team behind the operation, if they have a real world product, what the future plans are. Ask yourself are they solving a real world problem is is it another spin on a new decentralized currency which does absolutely nothing new. Don't rely on Google Adwords advertising.

Similar to the stock markets, there are scams but there's also many legitimate companies.

I know this may not always apply to all ico's, but i like to look for existing platforms. If they have an already working idea/platform, then it's in their best interest to make it work.
An ex. of this is unikoingold ico and the esports betting platform unikrn.

project scam is have first echange dev dump and never come back

ICO have plan, clear roadmap ,more information

so easy to you can know Different between an ICO and a scam.

actual products and services instead of promised and imaginary ones?

thank you op for sharing this to us. i am impress with the four tips you give and i am fully agree with the tips. there is too many ico now which want raise investor money and they are working hard with it but for a good ico they are really taking serious with their project so they don't want to make their investor disappointed.

and that tips is really useful to us which want to join into ico so we can prevent from the scam ico. beside that, we can know how to choose the good ico and avoid the scam, we can read the details from their whitepaper so we have understand their project in future.

A failing ICO might cause the team to bail with the cash, but that was not there initial plan, just the way they recoup the lost funds that they used to build the ICO. There are hundreds of things that scream scam and many times they are still off target.

Agreed. They should have some working software, such as Stockbet

nice advise my mate  we agree 100%

Nowadays it's hard to trust right a head in terms of engaging to a certain business,work or ICO.We must be guided on how to identify which is legit and scam. This post is really relevant for me and for everyone who wants to know if the ICO's they're joining is legit or scam. It's my first time to join an ICO and I'm searching for some tips to determine a legit ICO. I'm glad I've found this article. Thanks for sharing.

Regulation will kill any crypto not to talk of ICO! I think it high time crypto community solve it's own problem! We could decentralize oversight and due process on these ICOs, What I 'm saying in essence is that we could create tech that will serve as an audit with no third party! Smart contract is a case in point!

I think the difference between the ICO and scam is whether you have do some deep research and also some good luck.

It's all important when it comes to Investing in any ICO. There are so many scams around these days, 90% of ICO's could be scams or frauds. Must be very cautious these days indeed!
When looking into an ICO, you must check the website, the whitepaper which would be found on the website of course, look at the roadmap and see if that is achievable, if the goals are realistic.
It's important to look into the board of members and the advisors too, they could be a bunch of random people found on google. You need to make sure their profiles are legit and have some background and experience in the field.
Finally check forums and the official telegram group of the ICO, you might find some information there that might interest you or persuade you to invest in or not.
Good luck on your search!

thanks for the info. Very useful.

BUT I don't really like ICO there's a lot of minuses
- running into a Scam
tokens some projects pay Toko through the floor, and more
- sometimes I wait for the shot after ICO price and it goes down

I think it is better to invest in projects where there is at least some sort of product

In general I try to avoid ICOs. It's a shame really because I'm sure there are some that actually mean well, but most of what I see involves people never receiving their coins, coins being drastically under the ICO value, and/or the ICO team straight up vanishing. It's pretty hard to judge anything posted on here because I just feel like most of the positive comments are from phony accounts so I tend to believe the negative ones more (though there are plenty of obvious spam attacks, too).

Does anyone have an ICO success story?

The information that you just provided is so accurate and understandable. I personally consider it to be informative since it provides us investors with aspects to look for before we can actually participate in ICOs so that we can avoid getting scammed. Its sad how some ICOs scam investors their hardly earned money and I hope they also find it informative for the sake of their own investments.

These are indeed some very useful tips to get early hints of scammy projects. Usually the cover letter tells everything, and of course more details reveal if you read the whitepaper. And if we follow the linkedin/FB links of the team members, then also we get a lot of info. For example scammy ICOs won't have working links of team members, or their team members won't have profile pics etc. But of course, these methods are still not enough. Scammers are always a foot ahead of most of us.

Thanks for the tips. Quite a good note especially for newbies. However, sometimes even at first good looking ICO that corresponds all the criteria can occur a scam.

Yes, I agree with you. I think that Whitepaper and Founder Team are the main factors that determine the quality of the project. Generally, I decide whether I should invest in this ICO by judging these two factors.

No way to know. Even the most reliable information can be suspect. There is no telling at all sometimes. Many times it is not even a scam but a poorly handled launch. Bad marketing, bad rumors, or whatever can ruin a new launch. Bad thing is that even the legit ICO seems to be scam as there are so many scam ico these days and very few are real and good ones.

To be honest, it is hard to choose the right ICO to invest. There are many factors effect in a succesful project. the devs team can't control all of them. However, let research carefully with his advice, you can increase success's rate.

You will need to determine the legitimacy of the ICO, by checking the site, vision and mission, check the team and what they plan to do to support this ICO.
But most of the comments you already stated is enough.