How to spot crypto and ICO scams

Dozens of new cryptocurrencies are released every month, and with these new tokens and coins come a series of Initial Coin Offerings (ICOs). The appetite of a wide range of investors for these opportunities has grown, despite the fact that cryptocurrencies arrived in 2018. All of these factors attract scammers. Because once investors show that they are willing to invest money in a highly speculative cryptocurrency, it looks like they are also likely to invest in fraudulent tokens or ICOs. The prospect can be daunting for the cryptocurrency investor who wants to take full advantage of the multitude of new investment opportunities while remaining protected from fraudulent ICOs and incomplete coins and tokens foreign exchange market today. Blockchain and cryptocurrency technology is developing rapidly, and even seasoned investors can struggle to keep up with the terminology. While there is no guarantee that a cryptocurrency or blockchain startup will be legitimate or successful, the steps outlined below can help you be as sure as possible that you don't fall for the trap. a scam.



Get to Know the Team

Perhaps the most important success factor for any ICO or cryptocurrency is the developers and management team behind the project. The cryptocurrency space is dominated by big names, with superstar developers like Ethereum founder Vitalik Buterin who can create or break new projects just by listing their names on a development team. For this reason, it is more and more common for crooks to invent fake founders and biographies for their projects. The best protection against this fraudulent tactic is to thoroughly investigate every team member on a project before investing in forex trading platforms in India. For example, it's a bad sign if you can't find information about a particular developer or founder on LinkedIn or other social media channels. Even if there are profiles, check that their activity matches the number of subscribers and likes they collect. People who rarely interact with their followers and still have thousands of fans may not be real. In addition to determining if the development team is real, it's important to make an effort to see if their credentials are kept up to date. Do the founders have the experience they claim? Is it relevant for the current project?

Pore Over the Whitepaper

A white paper on cryptocurrency or ICO is the core document for this project. The white paper should set out the context, goals, strategy, concerns, and implementation timeline for each blockchain-related project. White papers can be incredibly revealing - businesses with an attractive website can show that they lack a fundamentally sound concept. On the flip side, a business with a misspelled website may have a white paper that features a rock-solid concept and a carefully thought out implementation plan. The first step in analyzing a white paper is to read it carefully. Check that the white paper contains additional resources including financial modeling, legal issues, SWOT analysis, and an implementation roadmap. Companies that do not offer white papers should be avoided at all costs. Still, it is possible for a fraudulent company to submit a compelling white paper, as was the case with PlexCoin; This company managed to raise more than $ 15 million before the SEC intervened to shut it down. A white paper should answer any questions a potential investor may have, what sets this particular project apart from its competition, how you plan to be successful, and what actions you will take to achieve your goals.


Look to the Token Sale

Each ICO relies on a token or currency system to facilitate the crowdfunding process. The legitimate businesses and efforts make the system itself and the progress of token sales easy to see for potential investors. Look for token sale numbers while the ICO is in progress. Better yet, watch the token sale over time to see how it progresses. If a business makes it difficult for someone to track their ICO's progress, that's a major red flag for best broker in India for forex. Some fraudulent ICOs will hide their token sales progress under the guise of unique mailing addresses. This prevents potential investors from seeing exactly how much has been taken and how much time is left to sell. In some cases, this can be an attempt to create a sense of urgency among potential investors, even when there is no evidence of a successful sale.

How feasible is the project?

While it may seem obvious, ICOs and cryptocurrencies have the best chance of success if they have the basic structure to outlast their competition. Many versions, even widely published ones, failed after initial interest. Your best chance for a successful investment depends on a business with achievable and achievable goals. The company must first have a convincing concept, but it must also be able to implement this concept in the short and long term. In addition to the issue of feasibility, there is also the issue of transparency. Businesses with good concepts and models are more likely than others to want to be as transparent as possible to the wider community. Look for companies who want to keep potential investors up to date with detailed and regular progress reports on the company's website or on social media. It's also helpful to verify that a company also has a timeline of what happened in the development process.

Exercise Caution

Even the best-performing ICOs and cryptocurrencies have been criticized for being motivated by speculative investments. The idea of getting rich quick by investing in a hot new venture is tempting enough to attract both seasoned and newbie investors to risky areas. Be careful when looking for new investment opportunities in the ICO and cryptocurrency space. Keep in mind that there will likely be projects that sound too good to be true. Take the time to check every detail and assume that the lack of critical information could be an attempt to hide a wrong model or concept. Seek outside sources to verify the legitimacy of a project before making an investment, and always ask questions that you still can't find answers to. The fields of cryptocurrency and ICO offer huge opportunities for investors who have done their homework and can make informed investment decisions. They also present pitfalls that can result in the loss of large sums of money due to scams, scams, or even legitimate businesses that are simply ill-conceived and unsuccessful.