How to spot an ICO SCAM

[Haladay]

I love this methodology, and I am sure it works. However, as you see, people — I mean dishonest ones — are ready to risk and invest into developing their fraud sites to steal much money further. They become more and more sly, and it is more difficult to catch the scammer. 

Check their identity, I mean the team members. Check their CV, linkedin pages etc.

This will give you a correct idea about the rest of the project. Also check their company license and registration number if possible.

[1715362664]

1715362664

[1715362664]

1715362664

[cryptoalfs76]

Hi guys, I want to share with you my simple methodology (beta) of spotting ICO scams.

The methodology

There are criteria with various risk points. Summarize all the points of the criteria that the ICO meets to get total score. Total score represents a risk grade on which you can lean to take a risk or not.

Scam points and criteria:
1 point: minor suspicions (for each)
3 points: anon devs; no code snippets, videos, or beta; rushing
5 points: unrealistic goals; fuzzy whitepaper; self-mod topic
10 points: bought account; no escrow

Risk and total score:
low (0-5)
medium (6-10)
high (11-15)
very high (16-20)
extremely high (21 and more)

Example

Let's imagine there's an ongoing ICO of Supercoinxxx in which you want to invest some money.

The topic is self-mod (5 points) with devs that have unrealistic goals (5 points) like creating a decentralized stock market in 2-3 month and a fuzzy whitepaper (5 points) with no technical details. Also you found two minor suspicions (2 points) based on your experience. Which gives 17 points in total. Based on that score you conclude that risk is very high and skipping this ICO.


Updated: added "no escrow" criteria.

in my own opinion i cannot determine if that ICO is scam because i thinks  all coming from this forum sites is filtered there application before  they introduce to the market, for bounty campaign participation or investment.we only know if the campaign is scam or  fraud if they not give a payment to all the participant or the investor in the end of campaign.the only things should i know by put the name of that ICO in the google and  put a word scam and search if that campaign is legit or fraud.

[ziyush]

There are a lot of ways to identify fake icos but you need to take measure to protect your investment from fake icos

Don’t Disclose your private information- Participating in ICOs or airdrop is not a bad thing, but before having proper information, never disclose your private information like wallet information, number etc.

 Check and verify the name of the Founders and Co-Founders- Every Initial Coin the offering has a founder or a co-founder, but when the ICOs which are Fake put the name of founders who do not even exist. Before doing any activities related to ICOs the individual needs to check the names of the concerned person and check the person’s virtual credibility.

  Reliability of ESCROW- ESCROW is an online wallet which preserves the coin unless and until the transaction is done. But when we are doing a transaction we rely on any of the wallet platforms and the end result is the money is debited and the deal is unsuccessful: this means the ICOs are fake. So, while involving in certain constraint make sure they use ESCROW for offering ICOs.

 Get ahead with an email confirmation- Generally, a real airdrop shares the individual a confirmation mail, if you are not getting a confirmation mail on your registered mail id neither any OTP, you should walk –off from the deal.

source- https://cryptomaa.com/btc/protect-your-money-from-fake-ico-and-scam-cryptocurrency-projects/

[Sebas.tian]

There are many metrics to use. One is to look at their linkedn profile. Their whitepaper can also be a tell. In my experience, when the text in the whitepaper is not selectable, most likely the project is a scam. Pretty absurd but it happend to me in translations many times.

[Hobbledehoy]

There are a couple of things that you could look out for to spot an ico scam
You should always look out for the team members, make sure that you can put a face behind the project, without a face then you should be very wary
Make sure that you confirm and crosscheck any information before you invest your money into the project
Look at the previous places they have worked at

[l10no]

this is a very mathematical theory, it's probably true this theory, I will try to calculate the possibilities. very helpful if this theory is created and can be understood by everyone. thank you

[Accts4u2]

For ico scams they do not really put a lot of work into the project because they know that they will not be sticking around for long so they are always unprofessional looking and when you are reading their whitepaper you will observe that there are a lot of typos in the document, that is what I mostly look at when looking to invest in an ico

[macit800]

You need to verify the project with different things, like the ICO reviews, experience of the team and their website. This can help you with giving an idea about an ICO.

[FurDich]

Hi guys, I want to share with you my simple methodology (beta) of spotting ICO scams.

The methodology

There are criteria with various risk points. Summarize all the points of the criteria that the ICO meets to get total score. Total score represents a risk grade on which you can lean to take a risk or not.

Scam points and criteria:
1 point: minor suspicions (for each)
3 points: anon devs; no code snippets, videos, or beta; rushing
5 points: unrealistic goals; fuzzy whitepaper; self-mod topic
10 points: bought account; no escrow

Risk and total score:
low (0-5)
medium (6-10)
high (11-15)
very high (16-20)
extremely high (21 and more)

Example

Let's imagine there's an ongoing ICO of Supercoinxxx in which you want to invest some money.

The topic is self-mod (5 points) with devs that have unrealistic goals (5 points) like creating a decentralized stock market in 2-3 month and a fuzzy whitepaper (5 points) with no technical details. Also you found two minor suspicions (2 points) based on your experience. Which gives 17 points in total. Based on that score you conclude that risk is very high and skipping this ICO.


Updated: added "no escrow" criteria.

When the development team are not following up what they have promised such as coins on time and schedule for distribution.I think It easy to determine it by asking frequently at their telegram page and if they wont answer directly or it takes days for them to reply

[makankambing]

This is my redflags about scam ICOs :
❌ The first thing you see on their websites is 'Buy tokens now', '50% discount ending in x days', a count down timing to the end of ICO (means they only care about the money, not the project itself)
❌ Display all the ICO ratings from ICOBench, TrackICO etc
❌ Heavy advertising on ROI (how much you can potentially earn etc)
❌ No contact details (or fake)
❌ Whitepaper focuses on ROI instead of the problems and proposed solutions
❌ Fake team (please Google or LinkedIn search to verify the team members)
❌ The idea itself doesn't need a blockchain but they die die want to use blockchain (to grab money, duh)
❌ 'Buy' advisers (those advisers serve only 1 role, put their LinkedIn profile on the website, and that's all). If the advisers are 'advising' 40 and 50 projects at the same time, I don't know how they can add value to the projects.
❌ Parent company is failing or running out of money so they pivot to blockchain to raise fund and stay afloat

[Luvr1000]

good question, I took part a couple of times in companies that were successful in all the paramitres, but in the end it turned out to be mashenniki, I don’t know how to make the right choice today

[leviathon]

I just go to the website of the ico just to see what the coin to se what they are offering the investors. Then I look at their social media profile to make sure that they are the real faces and to know what they have worked on previously before working on the coin. Then I read the whitepaper, if they are lax on it then it is a fake one, legit ones want to make a real impression