The best strategy to follow in ICO investment is the antique old "caveat emptor" trade principle, aka "let the buyer beware" or "do you own research."
As such, the environment has become so irresponsible that even the SEC has created a fake ICO called "HoweyCoin" brimming with red flags (including guaranteed returns and random celebrity endorsements).
It must be a stressing issue if one of America's least digital connected agency starts creating fake fraudulent use cases to warn investors.
The SEC indeed shared valuable insights on fraudulent ICO patterns, that's why we tried to figure out a bunch more.
Here's our non-comprehensive list of ICO red flags to supplement the SEC's warning:
- 1. Promoting blockchain technology rather than a product
- 2. The only token functions are "money functions."
- 3. Guaranteed returns and MLM incentives
- 4. Unclear token distribution and extravagant bonuses
- 5. Opaque private sale valuation
- 6. No vesting period
- 7. No hard capitalisation
- 8. Ideas, ideas, ideas
- 9. Poor media mentions
full article https://tropyc.co/pages/news/what-makes-an-ico-shady-af