WAYS OF FRAUD IN ICO. HOW TO NOT LOSE YOUR MONEY

[bountyflex]

Now the crypto-currencies and ICO in particular are very popular, everyone wants to make the success of the departing train and become rich, so for the first time many people enter the industry before they can understand it, they start investing. In this article we will tell you with what types of fraud you can face and how to avoid them or at least minimize the risks.

SCAM PROJECT
The whole project, in which you are going to invest, can be created only for one purpose - steal your money. Key features are the fake command or its absence on the site. How to check - on the site of any good ICO there is a separate team with photos, names and links to LinkedIn. These names must necessarily google, if it turns out that someone with this photo has a different name, there are several identical accounts in social networks, accounts are created recently - these are signs of a scam.
Another person can really be real and be part of a team, but after him there may already be dark stories, there are also such fools who already have a bad reputation continue to work under their own name.

Whitepaper
Is a technical document, explaining the essence of the project in an accessible language. It is required to have any ICO, excuse in the style: "It is in development, we will soon release." Go by. How to release, and think about investing. This text is mandatory for reading, even if it is large and boring, also in English. Google translator to help. The document must be literate, understandable, well-designed. This is not a guarantor, but again, some scammers do not even bother with this.

Why is the project work on blockchain?
The key question that should be a clear answer, otherwise the project goes by. The answer should be clear to you, and the team should know it, if they can not give a clear answer - an occasion to ponder. By the way, quite a decent explanation will be even a convenient fund-raising. If the token is only needed for this, it is not 100% guarantor of the scam. Another good reason: security - you need to preserve the important data for the project, if it is directed to their collection and storage, a trading or service platform - you need an internal crypto currency on your platform that has direct functionality for the project (for example, payments inside the trading platform).

The originality of the project
Is not the fact that they are scammers, but you can lose money by an unsuccessful investment, not just as a result of theft. If the project has already a million successful competitors - think three times whether it makes sense. Standard examples of endless clone projects: the exchange, its coin with mining, a new wallet, the hardfork of another's coin, another project that corrects the "unsolvable" problems of the existing industry.

Thanks for reading.

[travwill]

I think this topic should be moved to the "beginners" section. It would be good if you complemented your topic with more detailed examples of analyzing these criteria.

[bellamente]

Your story is very good, but it is written in a hurry

I think we need to add more material and examples so that newcomers know how to avoid fraud in ICO

[askmecrypto]

I would say it is a nice post for beginners and it do have a lot more scope to add into.
I will put my 2 satoshis by doing that:

1. Check the credentials for the Team behind it.
2. Check for the partners and big investors, is the project backed up by big companies or institutional investment firms?
3. Check the authenticity of both partners and team behind it. Are those real names with real partnerships or are those just some company logo to fake partherships, are there any documents or articles that prove the partnership is genuine.
4. Stay away from ICO which are using big celebrities name for promotion.


There is much more to add, but I guess for now it will add value to the thread.
Cheers!!