ICO Auditing

[Naida_BR]

Recently i discovered that the rate of SCAM ICOs have increased significantly. Thus, from that moment i sqeeze my mind in order to find a way so that the community will get right of scammers and eliminate them.

Scammers do not only steal money, but also they destroy the whole idea of the decentralized system. This system is based on trust and trust is decreased as Scammers are everywhere.

Given that, i was thinking of an Auditing Control of ICOs. ICO listing is a good step because it provides some information but not efficient.

I have not developed clearly this idea in my mind but i think that something like this should happen in order to protect the crypto-community.

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[BQ]

Isn't the point of decentralization to be trustless?

There's already plenty of sites that values ICOs on various aspects, icobench is one.
they judge things like the team, idea, and such.

if people don't do their own research, they might end up joining a bad ico, and well, there's not much of regulation here yet, and it's likely they'll never see their money again if they join a bad ico.
it's a bit of darwinism, people who give out their private keys or doesn't take fundamental steps in protecting their crypto - they lose it.
same for those who simply fall into the ico scams saying "1000% in one week!".

sure, there's some legit-looking icos that even a critical person could fall for, but that's in a way part of the game, sadly.
aslong as the team exists, looks real - real names and such - they'd be risking much by straight out scamming.
however, dumping coins early and not clearly outlining the path of the project, is in some way illegal I'm sure(to manipulate the price?)
but there's waaay too many small crypto projects going on for anyone to properly stop that I think.

And beyond icobench(and other sites like that), a good sign in general is for example AmaZix - if they're present, they've investigated and judged the project to be safe,
as they don't want their name to go with a scam.
CoinMetro which is an exchange (not yet launched) will also have an ICO platform which will make both participating, and also launching, ICOs much easier - and safer.
(they take pride in being the first, or best or something - in terms of legal adoption).

worth mentioning is that I wrote a thread here for analyzing icos before choosing them, maybe you have some input for that  

it's how like the vast majority of bounties created here on this forum, never seem to reach any such site as icobench, yet everyone rushes to join those bounties, and are never paid, or the projects die.
this whole ICO wave is a bit too new, soon it'll probably get regulated and to participate in an ICO you have to send in blabla legal documents etc, any serious project already demands KYC..
so, you might wish for safety, but at what cost?

[Sanjeewa101]

Be carefull, Trending can be killed
https://imgur.com/B98CBiR

[thomas.sgat]

I totally agree with you, ico rating sites are scam themselves.
To be myself at the head of an ICO I can tell you that it's anything they all ask to be paid to put good grades!! With a real price list, no transparency or credibility

[2342q6tegw]

Actually, I think there is a lot of room for improvement here, and crypto itself offers a unique one. As posters point out their are scams elsewhere and the approach to this is usually regulation. This fell down with the recession, so why? It is the same underlying cause.

Junk bonds were rated well, because the bond issuers paid for the ratings if Moody's wouldn't give you a good rating well standard & poor is down the street and they didn't want to lose out.  Most ICO rating sites, charge the ICOs, ratings are faked (this can be achieved by using sock puppets or alts) DD is best when paid for by the investor, because there is no incentive not to cheat.

Now since crypto allows for the easy pooling of funds to investigate an ICO (just set up a wallet or crowdfund for each ICO to be reviewed) review in order of funding, it can be used to lower the costs of DD, and allow at least an initial screening.

Now if all payments go through an address on the public blockchain which has been verified as owned by the rating agency, and all other address have been verified , you can instantly determine if someone is with them or not. (You could of course use PGP, but you can't match that with payment like crypto can.) Now you do have an issue that you can't prove they didn't take extra off book funds from ICOs. Of course you have that problem with fiat. You jave to rely on hired auditors and thrid parties. Any ICO rating sites run like this could be audited by blockchain explorers accountants. It would be much harder to spoof than accounts, becuase they would have to make lots of mining or purchasing into separate accounts with their ow
Transaction history . As long as the rating site had address published and signatures quoted and verified, it would be much easier to audit as long as they shied away from Monero and similar crypto.The real problem though is it takes investment to get going and popular and won't make as much money as a dishonest site, so those with the money would get a much better return funding a scammy site. Unless someone r someone with the funds steps up to help self regulate the sector is going to get more and more regulation.

[PlanetZebes]

That's why it's good to have a working open source project, that way the public can audit the code. A lot of ICOs don't release the source until much later though.

[Naida_BR]

That's why it's good to have a working open source project, that way the public can audit the code. A lot of ICOs don't release the source until much later though.

That's not enough. Of course it is good to have your code open, but how about people that do not know coding? They would be just lost around the computer language.

[Blockpass]

I like this idea. The more methods we have to legitimise blockchain and cryptocurrency solutions and businesses the better! I'd be interested to hear what you think of a blog post I published recently: https://medium.com/@blockpass/icos-identify-cons-or-scams-how-to-spot-a-good-ico-a811ffc3e933

[ankurguta87]

I totally agree with you, ico rating sites are scam themselves.
To be myself at the head of an ICO I can tell you that it's anything they all ask to be paid to put good grades!! With a real price list, no transparency or credibility

You are right, mate. As a matter of fact, ICO rating sites are now fast becoming an instrument of ICOs to somehow make their ICO look very promising and legitimate.

 You should try to go deeper than these sites. Urge yourself not to be satisfied with what the ICO sites are saying. Sadly i am assuming that most of the websites receive some sort of payment for thier review

[nitrocryptonitro]

Anyway, ICOs are so over-rated.
It sounds like that's so 2017... Lol
If you survey a little bit 2018's ICOs, most of the coins issued from them, and even the ones with a solid project and a good team backing them, suffer a bad dump after being issued.
Of course, you can still find contrary examples, but auditing an ICO can't tell you if you'll be in profit.
Even "successful coin" holders can still be in los after coin issuance.

You'd better wait for coin issuance, and then buy them on an IDEX.

[suchi2591]

It is very difficult to check authenticity of the ico, all the ratings are paid in crypto world.

[CryptAssist]

My understanding is there are a vast array of ICO rating and verification sites you can reference. OR build your own. They register with you, you examine every aspect and give them a rating. It would be very helpful for thse of us who are actually trying to fund a legitimate project.

[2342q6tegw]

OR build your own.It would be very helpful for thse of us who are actually trying to fund a legitimate project.

There are a lot, but if they are all taking payment from the ICO project, then they are not very viable.

I did think about doing my own rating site,  but isn't seem worth it  and I was having a hard time figuring out how to prove there was no ico payment for eating behind the scenes. How much would you pay for the rating of an ICO? Because if your not paying someone else is and there goes the rating system.

[Gypat]

Cryptocurrencies itself we say is a solution to a problem and if the solution we present comes with all these forms of shortcomings, then I think we are still at the same point. No solution has been provided to any problem. There should definitely be a way out of these scamming incidences. It is just becoming too much.

[VentureHero]

Best way to "Audit an ICO" is learn yourself. Of course, metrics change if you expect to be a quick gainer or a holder.

[LbtalkL]

Ico auditing is good to minimized scam projects, Ico ratings site should implement deep auditing and checking, ico projects should pass their standard. I think its better that all ICO must pass SEC and fully verified by them to minimized this risk for investors sake.

[gawer33]

perhaps it's time to be ICO to be centralized to reduce the risk of scams before people stop trusting any ICO. one way is putting the ICO in exchanges at the start and the right of an investor to know the office of the ICO. more trust on the ICO will help in cryptocurrency in general for mass adoption.

[blockstarter784]

I am working on ICO model where there are no team and no founders.

In this case where no people who must pay taxes and no interested to be scamed.

The trustless model is when you manage everything inside the community.

[swirox]

I think there is already a bunch of the ico rating sites but 90% of them you can just pay them and fake your marks, so I really that the community should only ban tal this ico rating websites who accept money to change marks, they will have a bad reputation so they will try to solve this by not accepting money anymore

[queenstella]

An audit provides an assessment of whether the organisation is following good data protection practice. I believe that audits play a key role in assisting organisations in understanding and meeting their data protection obligations.

Ways to carry out an ICO Audit  are as follows

- carry out an off site check of policies and procedures;
- carry out an on site review of the procedures in practice;
- provide a report which outlines good practice and any areas of improvement with practical recommendations to help you to address these where appropriate;
- write an executive summary that we can publish on our website, with your consent; and
- carry out a follow up review approximately six months after the audit.