Bitcoin Forum

All I hear about is that ICOs are scams and you need to watch out... Can someone explain why so many of these things are scams? What percentage do you think are legit businesses?

What do you not understand about the concept? People pay a lot of BTC/ETH for ICOs; usually even without doing any research, people just go in based on hype. So scammers created scam ICOs to make money off people. Pretty simple, really.

I'd say, probably only 7% of projects have real teams with real goals. and only a fraction of that percentage has a chance of succeeding. Take note that these are just numbers that are very rough estimates of mine.

Well it is easy way to earn money instead of a hard work and thieves found a new way to steal money. Just fool people with great project ideas let them invest etcs,btcs take the money and then vanish.

Everyone is dreaming to be rich without work and investing their money to projects without research it properly. In Turkey a 25 years old boy just fooled people with livestock project said "In a year you will earn twice of your invest" Turkish people invested 100 million USD to project. Boy took the money and run to Uruguay which dont have any diplomatical agreement with Turkey. Thieves like that always be there and best way to avoid them is detailed research.

You also need to keep in mind that even IF an ICO isn't a scam, that doesn't mean it will be successful.
Here, have a look at https://www.tokendata.io/ and click on 'Status' and let it sort by 'FAILED'. You'll be amazed at how many ICOs rais money, aren't successful and fail miserably.

So, please be careful and DYOR! If you want to invest in an ICO, research it thoroughly, don't invest what you can't lose and diversify (don't invest everything in one project) - make an exit plan.
As I said before, ask yourself this before you invest:

• Do I understand how the investment works?
• What are your goals?
• What level of involvement is required?
• What are the risks of this investment?
• How much do you expect to earn on this investment (ROI)?
• How long do you plan to invest? Is this a short-, medium- or long-term investment?
• What are the costs to buy, hold and sell the investment?
• Is there a clear exit strategy?

Be safe :)

And just to give you an idea about the money involved, from captainaltcoin.com (https://captainaltcoin.com/why-most-icos-fail/):

Pretty much anyone can start ICOs, and with little consequence to boot, and therein lies the problem. It's an easily exploitable model, which would have otherwise been a legitimately fresh way to raise funds, except it has already been overrun with scammers. It doesn't help that it's done on a cryptocurrency platform, which happens to be the hottest new "investment" at the moment, which means it can also take advantage of people's FOMO, along with the ease of investing.

I honestly can't tell what percentage of them are legit, but I probably won't be too far off by saying around 1%.

Only a very low percentage of the ICOs is real. Majority of the them only come to sell idea to us without the intentions to execute it. The moment they rake in the money, they pretend to be working on the project. Meanwhile, they are already working out their exit. There is so much of this due to lack of regulations.

This is the best piece of advice when investigating into a ICO you want to invest in. The biggest things these days is that ICOs love to do an exit scam just like bitconnect and USI TECH is getting there as well!


But good news is when regulations come this will clean up the crypto space.

Also alot of people think that because these mainstream media sites are banning ICO ads means that they are anti-crypto, this isnt true.
They are actually helping the crypto space by doing this, they cant possible clean up and investigate each one individually so the only option for them to do as of right now is to ban all of them all together!

The main issue with ICOs is that they are very easy to set up. The projects they supposedly back are not so easy to implement. It takes discipline, time, effort, and resources to actually follow through with the great idea. For this reason, even the well intentioned ones can end up failing because they plain don't have the follow through.

In my opinion, the best way to protect yourself from investing in an ICO that either was a scam to begin with or tried and failed is to get to know deeply one or two solid projects. From there you can get a sense of what it takes to actually carry out a successful complicated cutting edge project. When you are familiar with the winners, you'll be able to rule out the losers before putting any money into them.

I know of three truly solid projects going on in the cryptospace right now. I'm not saying they're the only ones by any means. They are ones I know about. I'm going to link to each one's thread. I encourage you to get to know these projects (regardless of whether or not you decide to get involved in any way), study them, and use them as a way to develop your own standards for how to judge whether or not a new project has real work and deliverables backing it up, or if it's all talk and hype. It can be extremely difficult to properly discern that, but it is necessary.

If you happened to have gotten burned on an ICO that never delivered (I've been there!), try to get past the sense of embarrassment and loss you undoubtedly feel and try to identify what you might have missed and why. Were there some glaring red flags you ignored? What were they? Did the development team consistently miss deadlines and then gave all kinds of incomprehensible reasons that sounded good? Were you outright lied to? The failures can also help you learn. Most importantly, how did the bad ICO differ from what goes on in a solid project?

OK, here are the solid projects:
DNotes (https://bitcointalk.org/index.php?topic=1924858)
DMD Diamond (https://bitcointalk.org/index.php?topic=580725)
NEM (https://bitcointalk.org/index.php?topic=654845.0) (Unlike DNotes and DMD Diamond, the NEM forum thread is not a main place where the devs disseminate information. You'll need to get on the appropriate Telegram channels for that info).

Because as of now the industry is highly unregulated. Knowing this and knowing that many people will not exercise their due diligence and research thoroughly into projects before investing, the scammers will scam. If there's a market to exploit, in this case being desperate or naive investors, there will always be bad people who will look to take advantage. This goes for the whole crypto space (not just ICO's) and all traditional financial markets--just do a general search of ponzi schemes and you'll see that these sorts of practices have been around forever. One rule of thumb to remember when looking into ICO's is that whenever 'Guaranteed Profits' are touted, stay clear.

Feel free to check out our piece on ICO best practices on our blog: https://www.mintdice.com/blog/want-to-join-an-ico-heres-what-you-need-to-know

Cheers!

I beg to differ with the opinion that all ICOs are scam. Yes, there are some clever guys who want to make some quick money. Then they are assisted by some people who invest blindly with the hope that their money will grow 10 times in 10 days. So hyper expectation is a major reason for scams. I strongly believe there are still plenty of projects that are worthy of crowdfunding and have very bright  prospect. But the investors need to be picky. Do your research before investing, inquire the ability of the team- these little activities can make a safe investment with lesser chance of scams.

Not all ICOs are scams, but yet some are. Some icos are scams because people make money very easy like that. They let people invest and collect their money but then the ico never continues from there on. People need to be sure to do their research before investing in any ico!!

Oh, yes there on coinmarketcap scammers is 90% of all projects. It is possible for years to maintain the course of a coin, simply giving out occasional news. They will write that things are going well, they all work and that it takes many more years because the crypto currency is such a complicated thing. Same and from the road map will lag behind and write that there were difficulties but everything will be done

very few are legit business, not also legit or not but many times there are very bad projects without whitepaper, or without developers
just thimk about it
in order to set up a ICO you need money and a website

before investing in ICO study a lot and analize the team behind it, the community etcetc

Here a good article I found about scams:
https://medium.com/@CryptoTutor/famous-scams-in-the-cryptomarket-623e0ef53b60 (https://medium.com/@CryptoTutor/famous-scams-in-the-cryptomarket-623e0ef53b60)

Most ICOs are scam because they are not regulated by anyone and anyone can start an ICO to scam people.

ICO's are not regulated yet. They most certainly will be, it's just a matter of time. Unfortunately history (and reality) show that if no regulation exists, people will try sinister things just to get a lot of money. And with ICO's, there are a lot of people that are willing to invest their cash without having the ability to do proper research or analysis whether a coin is good investments. This makes them (unfortunately) the perfect prey for scammers.

Have you heard about the CMC SCAM???

if its true or not?

So many ICO's are scam and few legit projects. You only have to do is to make a deep research, analize it carefully and read some past reviews about the project they made if successful. Have enough knowledge before investing in any ICO's.

I think that most ICO'S are not scams, it's just often may be shortcomings in understanding the idea, how the project works, inaccurate calculations, not enough analytics, not having enough time to prepare, unskilled employers.

You will find out at the end of the day that only very few of the numerous ICOs announced are real. Some came with good intentions but their project failed because they have no well throughout plan and did not put their idea to test. Some are outright scam. They just come to deceive and take your money, shutdown and disappear afterwards, knowing fully well that you can't trace them because there is no regulation.

People who are beginners and want to make massive returns in short periods are very gullible.

Because ICO's are not regulated. Nobody is checking their audits and on who really they are and where they really located. USA did regulate this already and rarely, they conduct ICO on the US because of it's strict rules.

Whoa. I had no idea they raised that much.

Also implied above: people get scammed because they don't know the stuff on his list, more or less. 

The stupid and their money are quickly parted.

It's simple:  Whenever money are involved there are scammers as well.
More money = more attractive for scammers (and there's lot of money ICOs)
 
In addition this whole thing can be made completely untraceable which IMO is the main reason.

1/10 ICOs is legit that is thru my experience that is why you need to carefully look for the redflags if you are planning to invest into a certain ICO.This is one of the cons of being unregulated or decentralized of these ICOs,because people which so much programming skills can easily fake projects that might steal a lot of money from people that is why we need change the system so that less people will be scammed.

I don't know also whY so many ico scam. Because my sister  one of those their victims in many campaign she was have no pay. They have necer think about the life of others. They just think about their selves how to get money. But we know they will not last. That is just money, God will blessed us too just wait.

It was hard to understand you but I think I'm in full agreement. Just be patient, don't get greedy and you'll be ok :)

Today you have to be very lucky to invest in profitable ICO.
There are hundreds of them created each day and only few reach their soft/hard cap.
Others are scam, so you have to be really careful choosing

Many ICO are scams because they exist many scams compagnie who invest their many to make scam airdrop and invest ethereum and bitcoin sites to stolen many from many people who want to make profits so becareful and don't put your money before you check the validity of ICO

alot of them because they do not include USA which is a big red flag in general because of regulations and USA has strict ones.


Alot of them are quick money grabs and have no real purpose!


alot of them name drop alot of big companies with no soild proof they are in partnership with them to get more peoples attention like big car brands


One ICO i seen recently that i think is a scam is Eligma and i may be wrong but i have seen them try to describe what their doing and they cant!

The cryptocurrency market has become very popular, many are looking for easy earnings and thoughtlessly invest their money , do not want to understand the details.
This attracts a lot of scammers who want to get a lot of money.

Because From the price for the purchase of low tokens and not reaching softcap.

I have been following several ICO projects and so far I have only found one project that is a scam project, of course the scam project is very influential on the confidence of investors who want to participate with ICO, so this is so detrimental to the world Cryptocurrency, the emergence of ICO scam project can not be separated from the hard to track the flow of funds flowing from the ICO project so that it becomes a fraudulent opportunity for those responsible.

Potential buyers should read, read and read before they get themselves involved in buying into ICOs.   Some are really good projects with great potential while a majority of them are outright scams.

Most of them are only base on concepts without any reality. That's why so many of them are scams

These kind of scams are nothing new and not exclusive to the blockchain platforms. You make a sham company and look for investors that don't scrutinize enough or believe in too much and then try to leech money from the as long as they don't notice. It is just rampant on ICOs right now because it is the new hot thing. Just use your normal logic as if you are investing in a startup company and you will be ok. Make sure to find the real people behind the project.

I think even though several ICO reveals to be scams in the end, it is not the big majority. Also the failures are more because of a few middle men greediness than projects themselves

ICOs that are scams are sham companies seeking to fraud the crypto users and get away with the money raised from crowdfunding, many a times the projects are hyped, and the supposed developers only avail a small amount of the tokes, rasing its prices, they later release  the hoarded portion when the prices are relatively high, dump the rest of the tokens and go under. its normally too late when the investors realize it was a scam

question from the series, why so many crimes in the streets?

Because many people just looking to get a large amount of money and after this disaster.

A not scam ICO will have:
 -  a good team with a background behind them
 - good written WhitePaper - no just whitepaper a good one with details about the project they are going to build
   as detailed as can - the most white papers a have reviewed are 'Bla Bla Bla'
 - good design of the ICO website
 - KYC is also a very strong point which indicate the ICO plan to list their Token to markets - the KYC process is not free

This is just the most important things to take a look at an ICO.

Totally agreed about bla bla bla section. I've seen great ideas with no real decisions behind them at all.

Cause you can raise millions without investing much. It doesnt concern all of the ICO,
but most of them wont even launch. Even if theyre not scammers, hard to find your investor
when hundreds of other ICOs appear every day, you might not get noticed even with a good idea

It's simple. If the IPO is regulated by law, then the legislation on ICO is only being developed (an excellent example is Belarus, where it has recently become effective). And some people have a great temptation to do nothing, not developing useful models, not doing difficult research just take your money and go very far

Because this is a good way to make money. :-\  Scam is really a lot, the only way to protect yourself is to choose carefully. 'm  working with the German project Vreo.io, maybe someone heard. They are doing dynamic in-game advertising and going to create marketplace for developers and advertisers. There is enough information on the Internet about the criteria for choosing ICO. The main ones
1. Uniqueness, necessity of idea
2.Clear target
3.Scalability
4.Transparency, properly allocated budget
5.Concept
6.Team
7.Distribution of tokens

Also, maybe a good WhitePaper in order investors to understand this is not only a fancy designed website but also this people know what they do. And not just like most of the white papers with 10 pages in explanations how crypto and blockchain works (info from Wikipedia).

People judge the legitmacy of an ICO mainly by ppt. That's why.

I think this is a very stupid question. The world is a bad place and it is full of bad people. They want to rob the people of money. They offer Initial Coin Offering and most people invest in them without doing any research.

Very informative thread guys, thanks!

Exactly! ;D So I think it's indispensable to learning enough information about ICO or blockchain rather than investing in them.

I can advise you one good ICO which 100% is not a scam. Check up Cryptics. This is the forecasting platform which does use 100% self-learning AI. Now they have already had a cool MVP, where you can see daily, hourly and 4-hourly forecasts for the different crypto currencie, exchanges and for the market. In September they are going to introduce a trading bot on the platform and in the future there are will be available to tade, make investments and get profits on it on their platform.

Many ico are scams becouse they are out off reregulation  and a lot of investors don't make any reserchers, they go with the crowd. By the way, the cryptomarket have a new trend - investing cryptofund platforms, becouse of that :D

Our world, the world of crypto, has a lot to offer. When I say offer, that can be good or evil. And just like life, there are people who just wants to cheat to be multiple steps ahead from others. Those are the scammers here in iur community. They sees to get an opportunity to cheat so they grab it right away.

There is no much regulations and supervision in the cryptocurrency market. Every bad guys can organize a project and then appeal for funds in cryptocurrency and just run away with it. That is the reason so many scams are in the ICO fields.

There are a lot of scam ICO's that people do to get money from other people and also there are no regulations that monitor development of projects.

I do agree on this one.  We can say that most ICOs are not scam, they are just failed projects.  We must know that these ICOs are just start up companies taking the high risk of marketing their innovations/ideas to gather investors.  If they do not reach the required investors (or the soft cap) then they can be considered as a failure and the bounty campaign will not produce any payment to those who are involved in it.

In relation to this, aside from researching if the the ICO is a scam or not, one should also research the idea and vision of this company if it is feasible and will attract sufficient investors for it to become successful.

there are certainly scams but sure there are  very legit ones that is even useful now. some of them may not have a good price that you can think its a scam but their product was released and users find it useful. there are some ICOs that i thought scam actually but i must admit i took a quick unfair judgement regarding it.

You just have to be careful before you invest into any new ICOs. To be honest it is risky to invest ICOs as we do not have enough information to know or foresee how the crowd sale will go which is a very essential area that affect their development.

It is viable for years to preserve the direction of a coin, absolutely giving out occasional news. They will write that things are going well, they all work and that it takes many more years because the crypto currency is such a complex thing. Same and from the street map will lag at the back of and write that there were difficulties but the entirety will be achieved........

Often scammers do not write about themselves, but about frontmen who will help to maintain anonymity to the founders. The key to a successful ICO is experienced professionals who can be easily found on facebook or Linkedin. And best of all, when the team is made up of famous people who were previously involved in some steep projects.


Every day, it is announced up to 20 projects that plan the initial placement of coins. But only 3% of start-ups realize the project according to the promises voiced during the ICO.

The ICO is just the first sale of tokens in order to raise funds to build the product..some of the ICO are just good at startup..and in the long run ..in any reason they fail..so they end up as scam..
There advantages and disadvantages of building an ICO, so don’t forget that now there’s a lot of scam in the field of ICO, so do your homework and do your own research.

That is hard to explain when the economic market is very volatile. To avoid fraud, I think you should carefully study the project before investing to avoid risks.

Without the supervision of laws and government agencies, these fraudsters can scam in the market at will, which is why so many scams!

The development of the digital age is always accompanied by two sides. Fraudulent schemes have come into the mind of investors. Therefore, it is necessary to have a correct view and psychological stability before the project.

You can see many many ICO grow up. How could it be? .Cryptocurrency is trend for several years now.Many people take advantage to make money from ICO.You invest ICO in BTC/ETH/LTC/BCH and they had money from you. Most ICO rely on trust but trust wrong is lost money. Remember The only one you can trust is yourself