The cryptocurrency market has since its inception proven to be a well of wealth. However, despite its money spinning qualities, numerous illegitimate ICOs have popped up. Statistics show that for a single legitimate initial coin offering, there are ten fraudulent initial coin offerings. This ten to one equation births the need for investors to familiarize themselves with the cryptocurrency market. This can be done by these investors knowing the distinct trademarks of legitimate ICOs. Only then can ICO scams be avoided. With our top 5 tips and tricks, you will avoid obvious ICO scams.
Since the launch of bitcoin (the first decentralized cryptocurrency) in 2009, various initial coin offerings have flooded the crypto market. Needless to say, these ICOs are an amazing avenue of investment and have enjoyed an influx of investors. While cryptocurrency can indeed be a gold mine and an incredible investment option, the market has over time been breached by fraudulent schemes and companies. Money has been made, money has been lost and fingers have been burnt. Recent research reveals that ten highly placed ICO Scams swindled investors of a whopping $687.4 million dollars. With this in mind, there is a need for investors to familiarize themselves with trademarks of unique ICOs in order to avoid ICO scams. Let’s explore these trademarks.
1. Presence of A Well Detailed and Unique Whitepaper
Every genuine ICO has a well-detailed whitepaper. Before an ICO is launched there should be a reason behind its creation. What project or venture does the ICO seek to sponsor? What would investors gain from investing? What is its growth strategy or product development strategy? These questions should be answered in detail and the answers should be provided in the ICOs whitepaper. An incomprehensive whitepaper is a red flag warning that you should steer clear. Also, you should check for plagiarisms in the whitepaper. If any degree of plagiarism is detected, then that is a scam alert.
2. Genuine ICOs Hardly Guarantee A Profit Percentage
The crypto market is ever changing and volatile. With such inconsistencies, genuine ICOs hardly promise it’s investors a fixed amount or percentage of profit. Any ICO that promises you specific amounts or percentages should be absolutely avoided.
3. If Team Members Are Known
It’s a norm for every real ICO to make known its members by displaying them on its whitepaper and website. This enables you to know who exactly you are going to be dealing with and what qualities they have. If ICOs team members are unknown, that is a sure sign that you should keep your distance.
4. The Company Should Be Incorporated
Incorporation is undeniable proof of legitimacy. Any company that has no shady deals would take the necessary steps to get incorporated and secure your trust.
5. No Feedback from Companies After Contacting Them
If you have tried every available avenue to contact the company behind an ICO, and there is no response or an unexplainable delay in response, this is a sign that something is not right about the company. It just might be a fraudulent money-making scheme. On a final note, in addition to these warning signs, before dealing out your hard-earned cash, do adequate research, don’t be scared to ask questions, and trust your instincts. With caution, you will avoid the pitfalls of cryptocurrency.
Michelle Jones (2018 September 5) How To Spot Fraudulent ICOs And Avoid Them. [Web blog post]. Retrieved December 30th 2018 from https://www.valuewalk.com/2018/09/spot-fraudulent-icos-avoid/amp/
Fortunejack teams (2018 September 12) How To Identify And Avoid ICO Scams.[Webblogpost]Retrieved December 30th 2018 from http://www.easybib.com/reference/guide/apa/website
BLMP (2018 June 27) Avoiding ICO Scams. [Web blog post] Retrieved December 30th 2018 from https://medium.com/@BLMPNetwork/avoiding-ico-scams-cd5d108266b3