Bitcoin Forum

Scammers try to improve their methods of work, but over and over again they get the same mistakes.

Every day, the market launches an average of four ICO. But how with such a variety to choose a reliable project and not stumble upon scammers?

One tip: you need to conduct your own thorough research. Pay attention to the alarming signs, delve into the details, calculate the possible risks and only then decide whether it is worth investing in this ICO or not. An informed investor can seriously improve his portfolio and develop a long-term profitable strategy.

Here are the eight main signs of a fraudulent ICO.

 1. Non-working, poorly made or template site

A site is, in effect, a booklet or catalog of a company that conducts an ICO. But some scammers do not pay attention to this issue at all. The clumsy site of a rogue ICO is usually a standard template with minimal changes (for example, Ethbay). Although, having studied the ICO site, you can not always be able to recognize the scam with absolute certainty, most of the crooks are too lazy or stingy to entrust the work on the design to the developer or web designer, so this is the first thing they save

2. Fake information about team members  

It is very important to know what kind of people are behind the ICO project. And first of all you should find out if they really exist. In one ICO (we are talking about Veio) for the profiles of team members in general, photos of random people from the Internet were taken.

Some ICOs simply point out in the team of non-existent people, and do not go on further tricks. However, sometimes scammers show some ingenuity:

* Create fake biographies of nonexistent team members;

* Indicate the names of real people, but they lie about their experience and previous places of work;

* They say that their team consists of people who in fact have nothing to do with this project;

* They say that their team consists of anonymous developers (which probably do not exist in nature, or they do not have sufficient qualifications).

If you can not find ICO team members on social networks, there is no evidence that they really took part in those steep projects that are mentioned in their biographies and do not see what this project says on their LinkedIn accounts, then, with a high probability, you are dealing with scams.

 3. Doubtful or unoriginal White Paper

White Paper is the quintessence of the project. It contains all the information that is necessary to ensure that the investor decides whether or not he should support this ICO. Pay attention not only to the originality and literacy of the presentation, but also whether there is any useful information in White Paper that will help you make a considered investment decision. The alarming signs are the presence in White Paper of plagiarism and unrealistic and unsubstantiated promises, as well as the lack of a detailed plan explaining exactly how this project will actually achieve the tasks set.

4. Fuzzy goals of the company

Each project or ICO has its own goal - and it must be realistic, concrete and achievable in the foreseeable future. If the company sets tasks that are "too good to be realized", you need to carefully check whether the project team has the technologies and resources necessary to fulfill their promises.

5. Unused repository for storing code

Because some ICOs use blocking technology, to test their reliability it is worthwhile to study the repository to store the code for this project (GitHub or some other). If the ICO claims to use open source code, the repository check will immediately answer whether it is so or not, because code updates should occur at least once every two weeks.

6. Lack of presale

It is important to note that not all ICOs have presale, however for most projects the sale of tokens does not occur in one stage. Having a presail also does not guarantee the reliability of the ICO, so it's important to clarify the number of tokens that the team is going to sell during the placement itself.

7. Unreasonable use of funds  

The White Paper ICO should clearly state how the funds raised will be spent. In addition, there should be a section in the documentation that states that the project owners do not have the right to sell their tokens for a long time, so that they do not have the temptation to cash out the profits and get rid of the money.

Target spending of funds should also be detailed. Most of the profits should not go to the pockets of the organizers! It needs to be invested in the project to pay for development, marketing, etc.

8. Information on the legal entity

Behind every ICO is a real company. Make sure that information about the name and registration number of this company is contained either on the project website or in White Paper. Well, if this company is registered in a country whose legislation is favorable to the ICO, for example, in Gibraltar, Switzerland or Malta.

Almost every country has a public registry, in which you can make sure that the company is actually registered there.

  Conclusion

There are many financial and technological organizations that protect consumers and customers from fraudulent ICOs, but the number of ICOs is thousands, and it will take a lot of time to check each one. With the help of the above tips and signs, you can conduct your research and not fall into the traps set by scammers.Merit this post if you consider it useful

Use search button before you post new thread. There is a thread about Scam ICO, feel free to read it first. https://bitcointalk.org/index.php?topic=5004397.0

Can I ask why you post with image ? There is any special reasone ? I don't think it's necessary, this isn't not blog or press release.

One more thing I can't understand how you earn 10 merit from ANN reply. I   extremely surprised  ::)

Thank you for the recommendations, the link you indicated really have extensive examples about how to expose scam projects. My post is a kind of self-knowledge. and I share this because I believe that more such posts will give that kind of  benefit for society.

Having a pre-sale doesn't always mean it is a real team. Sometimes they just release a fake number and don't bother to release the ethereum address so we can all check it. So much for transparency on the blockchain

Not everyone here are reading the whitepaper or checking the website completely. That's why controlling someone posting a promotional project will be a good idea. Suggesting that Newbies will not allow to post a project without a consent of higher ranks. In that way it will help reduce people who is posting a scam. Its a bit too harsh but it will be good suggestions. If higher ranks will post the project then people will accept it and check atleast or give it a try.

Whenever I read such lists like yours I always ask myself: "Would the list have helped me recognizing Savedroid as scam"? Your list doesnt, so its nice to identify obvious scam projects, but its dangerous to think if a project doesnt match any of your points its save to invest!

Nice post. I know this has been said many times before but it is nonetheless true and is worth repeating. We need to learn from the past and from our mistakes in order to move forward.

Thanks so much for posting this. It is practically useful to newbies like me. Scammers are everywhere these days and its unavoidable that you bump into them time and again. But these kinds of posts would help us avoid them and save time and energy. By the way, can't these scammers be identified and banned for life?! Just asking. Thanks!

I mostly care about bounties to be honest.

However, there are a lot of websites our there that review ICOs and assign a point to them. ICO Bench is one of them.

Now my question is aren't those websites trustworthy? can we just see how they rated them and decide whether we want to participate in it or not? I mean you definitely do not have enough time to read the whitepaper of every single ICO right?