How to check if an altcoin is a scam

[LogitechMouse]

I appreciate your work of copy-pasting some texts from websites to give us some advice, but in reality, knowing which projects are scams and which are not isn't that easy.

I've been involved in cryptocurrency for quite some time already, and I've seen some projects in the past who has everything. A community behind it, trust coming from investors, a huge amount of money they got from various investors (through crowdsourcing), and a project with a good use case, but in the end, they scammed their investors. What OP said is pretty obvious, and an investor can know that quite easily. The problem is that there are some projects that at first we know will be a good project, but will scam people in the end. With new projects being created every single day, only a few of them are becoming successful.

This is my motto with regard to projects. "You will never know that a project is a scam until they become one."

[DeathAngel]

It’s impossible to check & 100% come to the conclusion that an altcoin is a scam but you can do some due diligence. First research the team behind the project. Look for their experience, credibility & track record. Investigate the project's whitepaper & roadmap to assess their goals & plans. Analyse the coins community & social media presence. Be cautious of excessive hype & unrealistic promises. Look for transparency & clear communication from the team. Check for independent audits & reviews as well as any red flags such as plagiarised content or a lack of legal compliance. Remember to exercise due diligence & consult multiple sources before making any investment decisions.

[AnonBitCoiner]

The only way someone can know if a project of altcoins is fake or not is to make a proper research of that particular project and also check the sponsors of the project, what leads us to venture or invest such kind of trade is because of greediness, because greedy investors will like to invest to a place that they will make a surplus profit, and that is one of the reasons they don't bother to know if the project is a scam one or not.

It is not easy to know well about the newly born altcoin that it is trustable or not but if someone wants to avoid scame project then before investment they should read all the necessary materials present on the website of that project. Without knowing about the information of project on its website if one select certain token then I think its not about investment but its about gambling so be careful in choosing any project.

People are considering that all type of new project will be full of advantages but they forget that All creators of projects are not real but some of them show their greediness after gathering money from investors. The main point here is that don't be too greedy that without knowledge you are choosing any coin but be conscious as every penny possess an equal value for you so don't loss money but save it through stable and old coins investment.

[Kelward]

Some altcoins can still pass KYC, have a licence, pass some audit verification, and still be scammed. It's very easy, and it's common during this period to acquire information that could be used to pass such verification. Such verification is common online, and that's why the dark web has been declared a bad place because they sell things like that.
 
We should always do our own research and see how serious those who are offering some tokens to us are and if what they say they are creating is being created and developed as they say they are developing, because most of them are just making fake promises and using that means to raise funds from investors, but at the end they end up using up the money for their own selfish interests.

Exactly, scammers can do everything possible to scam people, they do all that to make people to believe that everything is okay with the project and they can even work or be active for some years to do business with customers with a legal and legit ways but when they have accumulated enough amount which have been looking for them they would start the maintenance of the site and from the maintenance of the site everything would went off and your funds would get lost.

And really this guys have different strategies to scam people though what the op said is good but whenever investing in altcoins make a good research about the project before investing.

This is very sad because developers who have the intention to scam investors can have a long term plan to gain trust and when they've reached their expected target they'll just crash everything, while their investors will bear the lose. So it's true that scammers can also follow the due process like genuine developers and fulfill all the KYC protocols, in the end their true intentions will still manifest.

This is by no means underscoring the OP well articulated warning signs that we should look out for when checking if an altcoin is a scam, they greatly help to reduce the chances of involving our hard earned money in scam projects. He has provided us with enough guidelines to carry out research on new projects, so it's left for everybody to decide whether to apply them or use other methods to carry out their research.

[Abu-Naim]

Some serious scammers will meet all these mentioned criteria and still scam people. They will make sure they get people’s trust by making good promises and show some good signs of potential to the projects and they will build their social media handles and also make good post and attempt to list the coins in some reputable exchanges just to encourage investors to fall victims.

6. Check how many exchanges host the token
If the token is only traded on a couple of decentralized exchanges (DEX), it is almost certainly a scam. Listing on a centralized exchange comes with KYC and additional trust, and the bigger the exchange the better the reputation of a listed token.

Do you mean that Decentralized exchanges are not to be trusted? Or do you mean that they are listing coins without potential? Or are you promoting CEX?
Central exchanges are not to be trusted because of KYC. KYC has ruin so many people life and centralized exchanges has gone with people’s money that is why they are not to be trusted with our money as we have seen in some experience of FTM and others.

7. Check the amount of liquidity in a token’s balance pool
Before you invest in a token, you may want to check general demand and the availability of liquidity. It is very easy to check a token’s liquidity on a platform like Uniswap V2 or other decentralized exchanges.

8. Check third party analysis tools
Smell Test – this does an automated audit of the token. The lower its score out of 100, the more likely the token is a scam.

These are good signs to confirm if a project is legit.

[tjtonmoy]

~Snip

There aren't any specific way that you can tell if a project is scam or legit. But the points that you have discussed here would actually be a valid way to see if something is scam or not. Then again it does not give the full picture. Despite being a good project for years, it could eventually scam people in the end.
Everything we are talking about are centralized and everything could happen to them at any given moment. For this reason, it does not matter how much the research you do, is the people involved in that project our scheming a scam then you can literally do nothing.
It's good to be cautious about everything. But if you send a little bit of suspicious behavior happening in the project, you should exit. Giving a second thought in altcoin market is the stupid idea.

[Makus]

Op you have well to list these steps, they can be added to one's research scheme to hunt out scam project. But I don't agree with your number 6,  because even legit newly launched coins are not listed immediately in exchanges, they have to take some time to monitor the coin for KYC and see if it's really worthy.

This is very sad because developers who have the intention to scam investors can have a long term plan to gain trust and when they've reached their expected target they'll just crash everything, while their investors will bear the lose. So it's true that scammers can also follow the due process like genuine developers and fulfill all the KYC protocols, in the end their true intentions will still manifest.

This is by no means underscoring the OP well articulated warning signs that we should look out for when checking if an altcoin is a scam, they greatly help to reduce the chances of involving our hard earned money in scam projects. He has provided us with enough guidelines to carry out research on new projects, so it's left for everybody to decide whether to apply them or use other methods to carry out their research.

Scam projects are becoming more difficult to identify. The scammers we used to know are now going extra miles to make their scam look very legit. As we advance by tracing scam project, they are also looking into making it look legit. They don't care the sacrifices they'll have to pay to get their coins listed in any exchange and gaining enough market cap. Once they've achieved that, the next you'll know the coin turned out to be a scam. Even your own research could fail you at this instance, so I prefer just isolating myself from altcoins especially newly launched project.

[lovesmayfamilis]

Not all crypto projects are created equal, identifying which crypto token is a scam, and which memecoin is legit.
Reference:- https://dappradar.com/blog/8-ways-to-check-if-its-a-token-scam

OP, share your opinion. After participating in bounty companies for a long time, have you finally concluded that it is necessary to check projects for reliability? Moreover, you are unique enough to submit for approval an article that you simply copied, although you added a source. Tell us how difficult it was for you to migrate content from the Internet and then claim merit.

Post: How to check if an altcoin is a scam
Category: Opinion
Section: Altcoin discussion

[icalical]

For me, in term of new altcoins, any altcoins that are about to launch their project, I always consider those altcoins is scam until proven otherwise, even if their coin is already listed. All altcoin has a potential to end up into a rug pull. What I do is that I only invest the money that I can afford to lose.

Don't get me wrong tho, I still invest on altcoin, at least 15% of my portfolio is altcoins.

[GlacierBIT]

The more time you spend researching a project, the more likely you are to find information about the quality of the project, and all your verification methods are working, always follow them before risking your investment. You also need to subscribe to all news sources to stay up to date with the latest news about the project, so you can also stumble upon people’s suspicions about a scam.

[Sophokles]

How do you consider that you are scammed? In altcoin industry most of the project has their own market maker for their token. That means there is someone from the project team who will control the market. This also gives them manipulative power and most of the time they do that. Just look at the price of ICP in its early stages. It was above 400$ and now look at its current price. Those who have invested early will consider this a scam but if you look at the projects twitter handle and team development then you will see the project is more than alive. You will be fooled if you only look at the price of a project. If the team is developing and they are transparent about their work then it is a legit project.

[kentrolla]

These are basic check which has to be done for all the projects but from my experience most of the Altcoins project will promise stuffs which would look too good to be true or which will tempt you to invest only by looking at the return on investment as scam projects focus more on monetary bait rather than sharing details about their projects and what they have to offer. Also we need to reach out to validate their dev team members to see if it's genuine or not and some just morph the pictures hence it would be better tying to connect with them or their previous organisation or associations to know if they really exists. But sometimes it's difficult to identify scam projects as few of them looks legit but they aren't really legit.

[Volimack]

Not all crypto projects are created equal, identifying which crypto token is a scam, and which memecoin is legit. How do you know which projects are safe to step into, and which projects are doomed to fall flat some months from now. The blockchain is awash with promises of quick money and easy rides. But it pays to know if the token you’re holding is part of an elaborate scam to separate you from your hard-earned cash. There are eight straightforward ways of carrying out your due diligence to avoid fraudsters

1. Start from the very basics by
a. Check for social media red flag
b.Check for the token’s address in a Google search

2. Check code is verified on Etherscan

3. Check the Etherscan comments section

4. Check the DappRadar blacklists

5. Check the token details in a token explorer
If you cannot find the token on CoinGecko or DappRadar’s Token Ranking (or a similar coin price tracker), the token is probably a scam. If it is on the token explorer and you see warning notifications like this, proceed with caution

6. Check how many exchanges host the token
If the token is only traded on a couple of decentralized exchanges (DEX), it is almost certainly a scam. Listing on a centralized exchange comes with KYC and additional trust, and the bigger the exchange the better the reputation of a listed token.

7. Check the amount of liquidity in a token’s balance pool
Before you invest in a token, you may want to check general demand and the availability of liquidity. It is very easy to check a token’s liquidity on a platform like Uniswap V2 or other decentralized exchanges.

8. Check third party analysis tools
Smell Test – this does an automated audit of the token. The lower its score out of 100, the more likely the token is a scam.
Reference:- https://dappradar.com/blog/8-ways-to-check-if-its-a-token-scam

Your points are useful to prevent scams but as far as I am concerned if you choose the right coin and the right exchange site you can stay away from scams. Coins which are not listed are more scams because no one knows when they will come to the market. If the coins are not listed I do not consider these coins safe.

[Ben Barubal]

  Take a look at his tokenomics, and if there is a whitepaper, read what the road map plan is. Then also look at social media platforms to see if they have built a large cryptocurrency community. Then, see if, from time to time, they give updates to their crypto communities.

  Although I'm not saying that what you mentioned is wrong, it may be true and helpful, but I didn't see what I said for that matter in what you posted here. Just always keep learning in this matter.

[danherbias07]

Check the team behind it. If they are not shy to post their faces and their profiles then there's a little chance they will scam their investors.
People are still afraid to go behind bars and as of recent news about cryptocurrencies, there are rich people who are getting sued because of their scammy projects. A team that is not trying to be anonymous has their faith in their projects and they will pursue to climb greater heights to the top 50.
But of course, we are not stopping there. Even if they are legitimate people behind one project we still have to make sure their platform can be a successful one in this new era. Some developers are just recycling projects from the ICO era and it's not good especially if those are trashed years ago. Check the whitepaper, it's very important.
From the past years, most projects who are climbing up are those that can trend, might as well check the marketing team behind them because they are also crucial in inviting more investors to increase the demand.

[odunybiz]

For me, in term of new altcoins, any altcoins that are about to launch their project, I always consider those altcoins is scam until proven otherwise, even if their coin is already listed. All altcoin has a potential to end up into a rug pull. What I do is that I only invest the money that I can afford to lose.

Don't get me wrong tho, I still invest on altcoin, at least 15% of my portfolio is altcoins.

We are in the same. I do buy altcoin because I believe altcoin can make you a sudden millionaire. Although he can also make a millionaire to become a poor being within seconds. This is why it's advisable to only invest what you can afford to lose on altcoin.

[GreatArkansas]

I'd say looking at exchange listing to verify if a project is legit is probably one of the worstrways to determine that.

Exactly and I tend to agree with this, even though listed on a big exchange the chances of getting scammed are still there.
(....)

Include also some exchanges that have listing fees, so for sure they don't care anymore about the project if it's legit or a scam because they only care about the fee they will get in the project, and last part, the users will be affected because these scam projects will just dump to retails.
But now there are some exchanges already improved, they have some research team to verify before listing, but for me it is still better to verify also it by yourself.

[wtsimis]

With my meager intelligence, I feel that I am not capable of understanding the cryptomarket until today.
Here everyone is saying one thing, the market should be researched well.
My question is how to research the market?
Market research is a project team members, their future plans, roadmap can be seen other than all these things?
Already we have seen many good project scams. All investors considered them as prestigious projects.
So I think if you want to invest in altcoin you can't be greedy. Don't get cheated by greedy overinvesting.

[odunybiz]

Some altcoins can still pass KYC, have a licence, pass some audit verification, and still be scammed. It's very easy, and it's common during this period to acquire information that could be used to pass such verification. Such verification is common online, and that's why the dark web has been declared a bad place because they sell things like that.
 
We should always do our own research and see how serious those who are offering some tokens to us are and if what they say they are creating is being created and developed as they say they are developing, because most of them are just making fake promises and using that means to raise funds from investors, but at the end they end up using up the money for their own selfish interests.

At the early beginning of cryptocurrency, scammers were less available in the space but nowadays scammers has put their eyes on crypto. They make use of the advantage of no way to trace token receivers to perpetrate their scams. There isn't any measure to avoid being scam in the space than for one to do his/her own research and invest less in altcoin.

[wxa7115]

With my meager intelligence, I feel that I am not capable of understanding the cryptomarket until today.
Here everyone is saying one thing, the market should be researched well.
My question is how to research the market?
Market research is a project team members, their future plans, roadmap can be seen other than all these things?
Already we have seen many good project scams. All investors considered them as prestigious projects.
So I think if you want to invest in altcoin you can't be greedy. Don't get cheated by greedy overinvesting.

Assume all new projects are scams, this may seem to be unfair for the few good projects out there, but when scams are so prevalent you cannot really afford to not think this way.

However if you are interested in one of those coins you need to do your due diligence while still assuming it is a scam, what you need to do is to try to find anything that does not match, like stolen pictures, inconsistencies with the resume of the developers, plagiarism and anything that may indicate they are not who they say they are, and if you find anything wrong with that project you need to assume the worst and not invest in it.