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Author Topic: How to avoid a scam  (Read 563 times)
vazarii
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November 21, 2018, 10:54:16 AM
Last edit: November 23, 2018, 11:52:51 AM by vazarii
Merited by Distinctin (1), Juggy777 (1), mikeywith (1), krishnaverma (1)
 #1

It has been reported that up to 80% of advertised ICOs turn out to be scams. So, how do investors, especially those who are new to investing or new to cryptocurrency, know how to avoid falling into the hands of these scammers? (source: https://cointelegraph.com/news/new-study-says-80-percent-of-icos-conducted-in-2017-were-scams)

Listed below are 3 suggested (but not exhaustive) steps that one can take before making an investment. Hopefully, this will help many of you avoid being scammed.


1. Do your background research:

Whitepaper: If you ever think of investing into an ICO, make sure you make your proper due diligence into different areas. Firstly, read thoroughly through the Whitepaper to understand how strong is the company's business proposition. It should be clear and concise with information to the goals, how these will be attained, the timeline, the funding model and token sale to name the most important. If the Whitepaper does not have much to do with the project's main idea, seems vague and poorly thought out with more emphasis on explaining blockchain related concepts, then know that these can be possible signs of fraud. On the contrary, sometimes the Whitepaper can seem utterly well written and refined, but when you look deeper, you will realise that the idea is likely to fail and can hardly be carried out. Additionally, it is always an option to examine the Whitepapers of some of the legitimate ICOs as a point of comparison to the Whitepaper in question (e.g. the level of detail, clarity, topics covered etc.). Any mention of 'guaranteed returns' or specifications of what returns you will get on an investment are big warning signs. In other words, any business idea that puts emphasis on the monetary incentive over and above communicating the strength of the business idea is certainly suspicious.

Website: Check if the website gives a clear idea about the core of the project. When a website is looking polished and clean, it is a good sign, but note that even scammers can spend money into great looking websites. So, the key is to examine the quality content provided besides the Whitepaper, such as links to a blog, press materials, videos presenting the team etc.

The team: Check the identity and experience of everyone who is involved in the project team, including the developers, and cross check if their identities are verified elsewhere, like in LinkedIn. Examine if the team's background makes sense and adds value to the project. Some scammers use the name of famous blockchain experts as advisors or team members, but these claims are actually fraudulent. Hence, always check the veracity of such claims.


2. Stay suspicious:

Before investing into an ICO, take a 'guilty until proven innocent' stance. Don't make any assumptions that a project seems legitimate or sound. Make your research and if something seems off, investigate every inch out of it. For example, you can join the Telegram group, where the ICO has their active community, and ask your questions there. Examine the genuineness of the response you receive.


3. Check rating sites: There are a number of independent sites (e.g. ICObench, ICORating, FoundICO etc.) that help investors to check how legitimate are upcoming ICOs. Some of them give a rating based on the various factors, such as business idea, team or finance model. Other sites help to call out scammy ICOs, such as ICO Alert. We cannot take the information provided on these sites for granted, but it may be worthwhile to see what is their point of view on the project in question. Additionally, it is always an option to check what experts on crypto-related forums online say (e.g. Reddit) about a prospective investment.



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November 21, 2018, 11:27:46 AM
 #2

Even the most experienced of investors could fall victim to ICO scam.
There are different tactics and approaches the underhanded developers take to make their project look legitimate.
I personally shy away from projects with no pre existing structure. It's not a sure sign of scam but it raises a red flag. And I know all what they have to offer are promises.

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November 21, 2018, 11:38:15 AM
 #3

IMO rating sites are not worth to trust.
OP seems that you put your effort into your post, keep trying.
Here are some good tips for you in ICO world by Coolcryptovator

Guidelines, how to spot a scam ICO & report effectively. ✔

Find the scam ICO list here and  here, some are active with token sale, maby you find ICO which you intend to invest  Grin

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November 21, 2018, 06:27:39 PM
 #4

Also, avoid the hype. Many people are just shilling or hyping that ICO or coin. Do your own research and never rely on other's opinion.
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November 22, 2018, 07:53:18 AM
 #5

A warning to everyone especially newbies, dont fall for twitter crypto giveaways scam. Never fall scam for someone promising you lots of crypto when you send him your coins. NEVER
It still shocked me how people fall for this
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November 22, 2018, 04:57:09 PM
 #6

Isn't it the best way to avoid scam is not to invest in ICO because majority of them are fraud? I guess that the best way for you not to be another victim of this stunt. In this market, if you don't used your common sense chances are you're going to lost a lot of money here.

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November 22, 2018, 10:32:38 PM
 #7

Just don't invest to any suspicious(ICO) investment that you are seeing nowadays except buying and trading on exchanges or investing to casino's bankroll's. Those ICO rating sites can't be trust too, they are offering paid review.

So what if you fall to an ICO that just paid good reviews, whether to those ICO rating sites, blogs, mediums and other sites that they can publish their ICO. This is happening so it's not enough to trust those rating sites.

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November 23, 2018, 02:36:29 AM
 #8

we may take other's review or comments about an ICO as an reference when you encounter a new ICO project or you are even a newbie to the market, before you started any participation you should be having enough observation, for example like knowing why the recent ICO would have gone might due to stricter regulations as every countries are emphasising or giving out outline or regulations in ICO projects or crypto-market at the moment.
Never forget to check out the news daily
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November 23, 2018, 04:14:41 PM
 #9

I have saved my thousands of dollars just because I did adequate research before investing. As it is recommended multiple times, one should invest his time before investing his money. Generally, when the scammers are attacking, they prefer newbies as newbies won't spend much time on thinking and doing the research but they invest recklessly trusting the commitments made by the scammers.
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November 24, 2018, 04:23:50 AM
 #10

It has been reported that up to 80% of advertised ICOs turn out to be scams. So, how do investors, especially those who are new to investing or new to cryptocurrency, know how to avoid falling into the hands of these scammers? (source: https://cointelegraph.com/news/new-study-says-80-percent-of-icos-conducted-in-2017-were-scams)

Listed below are 3 suggested (but not exhaustive) steps that one can take before making an investment. Hopefully, this will help many of you avoid being scammed.


1. Do your background research:

Whitepaper: If you ever think of investing into an ICO, make sure you make your proper due diligence into different areas. Firstly, read thoroughly through the Whitepaper to understand how strong is the company's business proposition. It should be clear and concise with information to the goals, how these will be attained, the timeline, the funding model and token sale to name the most important. If the Whitepaper does not have much to do with the project's main idea, seems vague and poorly thought out with more emphasis on explaining blockchain related concepts, then know that these can be possible signs of fraud. On the contrary, sometimes the Whitepaper can seem utterly well written and refined, but when you look deeper, you will realise that the idea is likely to fail and can hardly be carried out. Additionally, it is always an option to examine the Whitepapers of some of the legitimate ICOs as a point of comparison to the Whitepaper in question (e.g. the level of detail, clarity, topics covered etc.). Any mention of 'guaranteed returns' or specifications of what returns you will get on an investment are big warning signs. In other words, any business idea that puts emphasis on the monetary incentive over and above communicating the strength of the business idea is certainly suspicious.

Website: Check if the website gives a clear idea about the core of the project. When a website is looking polished and clean, it is a good sign, but note that even scammers can spend money into great looking websites. So, the key is to examine the quality content provided besides the Whitepaper, such as links to a blog, press materials, videos presenting the team etc.

The team: Check the identity and experience of everyone who is involved in the project team, including the developers, and cross check if their identities are verified elsewhere, like in LinkedIn. Examine if the team's background makes sense and adds value to the project. Some scammers use the name of famous blockchain experts as advisors or team members, but these claims are actually fraudulent. Hence, always check the veracity of such claims.


2. Stay suspicious:

Before investing into an ICO, take a 'guilty until proven innocent' stance. Don't make any assumptions that a project seems legitimate or sound. Make your research and if something seems off, investigate every inch out of it. For example, you can join the Telegram group, where the ICO has their active community, and ask your questions there. Examine the genuineness of the response you receive.


3. Check rating sites: There are a number of independent sites (e.g. ICObench, ICORating, FoundICO etc.) that help investors to check how legitimate are upcoming ICOs. Some of them give a rating based on the various factors, such as business idea, team or finance model. Other sites help to call out scammy ICOs, such as ICO Alert. We cannot take the information provided on these sites for granted, but it may be worthwhile to see what is their point of view on the project in question. Additionally, it is always an option to check what experts on crypto-related forums online say (e.g. Reddit) about a prospective investment.




I don't think that we can believe in rating sites. Some sites are not trustworthy. You should be careful.
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November 24, 2018, 08:01:33 AM
 #11

Even the most experienced of investors could fall victim to ICO scam.
There are different tactics and approaches the underhanded developers take to make their project look legitimate.
I personally shy away from projects with no pre existing structure. It's not a sure sign of scam but it raises a red flag. And I know all what they have to offer are promises.

yes, that is also the reason why we always have to stay alert and do our own research before investing.
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November 27, 2018, 01:37:13 AM
 #12

Isn't it the best way to avoid scam is not to invest in ICO because majority of them are fraud? I guess that the best way for you not to be another victim of this stunt. In this market, if you don't used your common sense chances are you're going to lost a lot of money here.
Yes, you're right but we still want to make profit with it and don't know how to avoid ICO scam.
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November 27, 2018, 09:05:16 AM
 #13

Just don't invest to any suspicious(ICO) investment that you are seeing nowadays except buying and trading on exchanges or investing to casino's bankroll's. Those ICO rating sites can't be trust too, they are offering paid review.

So what if you fall to an ICO that just paid good reviews, whether to those ICO rating sites, blogs, mediums and other sites that they can publish their ICO. This is happening so it's not enough to trust those rating sites.
Is there any trustworthy site review about new ICO?
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November 27, 2018, 10:00:16 AM
 #14

Rating sites just sell premium rating, and there is nothing to trust.  Roll Eyes
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November 27, 2018, 06:45:02 PM
 #15

There's no clear easy way to avoid scam in the crypto industry.  There will always be a time where you're investment looks like a scam.  The best way is to research first before you invest and prolly just trust the top 10 or up to top 20 coins.  Grin Grin
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November 27, 2018, 07:39:51 PM
 #16

I agree to your last point regarding ICO rating sites when you say everyone should trade the ratings with caution. Many ICOs pay these rating sites for good reviews, even if the project is very poor the rating won't show it. There were many cases in the past and it's likely the shitshow will go on for a while.
Sometimes ICOs are just a better gambling on a higher level.

Also reviews of crypto YouTubers like Suppoman or Ian Balina should be traded with caution. Keep in mind they get paid for the review and the informations you'll get there are very biased.

~chenille~
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November 28, 2018, 07:45:28 PM
 #17

Try and learn about how the industry works and research reviews.  For me, just invest in the top 10 coins  Cool Cool
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November 28, 2018, 08:24:46 PM
 #18

Thank you for providing tips and details, it is best to stay on the safe side.

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November 28, 2018, 08:41:59 PM
 #19

Do your own independent research, use many different information resources, and f something sounds too good to be true, then run. 
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November 30, 2018, 03:28:01 AM
 #20

 The post has definitely mentioned the basic research and understanding but you should be aware of the advertisement or promotion, be super careful and do not let yourself fall into the trap easily whenever you see some advertisement or attractive posts  with any reward.
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