Topic: How to avoid ICO scam by following very easy step. (Read 261 times)

Sure, now they are working on the first such RICO, let's see what happens, but at the moment this is the only way out of this situation in my opinion.

I like this idea.

No matter how I look at ICOs, the only thing that pops in my head is "SCAM".  I'd rather invest in coins (top10 to be sure) than invest in something that has more risks in failing.  This is just my opinion though but your post was very helpful!

This idea is a very interesting one and I would give it a try. I'm sure if there are ICOs based on rICO and ICOs based on the normal model we know right now, most of the investors would decide to invest in the project based on rICO. This can change the entire ICO business and bring more reputation to crypto in gereral.

The widespread implemention of rICO would shut down many scams or at least be a try to do something against scam ICOs. How it will work out isn't know yet, but I would really give it a try. Protecting investors is the way we need to go.

In fact, the business enterprises that publish ICO are usually illegal, because most countries have legally banned ICO, so some business enterprises circumvent the ban by registering in the legal country of ICO, but their targets are own national citizen.

I saw on the Internet that Fabian Vogelstellar, Ðapp developer for the Ethereum Project,  said that he was working on improving smart contracts for ICO, and it's will be rICO - “reversible ICO”. Investors will be able to return the funds at any time, I think with such a smart contract the number of scams will decrease significantly.

some links
https://twitter.com/feindura/status/1060668548127903744

Do not think that SEC did not know it's own guidelines when it said Bitcoin and Ethereum are not securities. Both  of them do not satisfy third and fourth critieria i.e investment of money is in common enterprises and investor will be benefitted by promoters efforts.

ICO is a business enterprises only, if a business do not know what legal duties it need to fulfill for starting the business , then it better to stay away from that business

If we're to go by that definition am sure lots of ICOs would match that exact definition and get thrown in as securities.
Even Bitcoin and ethereum which have been classified not to be can be viewed in different lights.

ICO scam is not a black and white case. And this I don't believe is a credible assumption that a project is or isn't a scam.

Hi Friends

Most of user are aware of the Howey Coin ICO and its announcement in the forum.  Howey Coin is actually  USSEC (United State Securities and Exchange Commission) initiative to educate the investor. Howey coin actually derived its name from a very famous case of SEC_v._W._J._Howey_Co. which is also instrumental for creation of Howey test.

Now,If an ICO is selling its token USA/Worldwide, then it will be very interesting to check whether an ICO token classify as an security or not. You can use the following guideline to check whether the token is a security or not by using Howey test.
 
"Under the Howey Test, a transaction is an investment contract if:

It is an investment of money
There is an expectation of profits from the investment
The investment of money is in a common enterprise
Any profit comes from the efforts of a promoter or third party "

You should not believe in ICO whether their token is security or utility and do the test yourself to find out in what exact domain it lies. SEC has already make itself very clear on the ICO offerings.
 
"ICOs, or more specifically tokens, can be called a variety of names, but merely calling a token a “utility” token or structuring it to provide some utility does not prevent the token from being a security."

So if an ICO token is already offered as security then you should check whether the ICO/company is listed in SEC. You can dircectly check the listing and research about company at below site:

https://www.sec.gov/edgar/searchedgar/companysearch.html

If ICO offering securities in USA does not feature in this list then it is indicator of red flag and keep yourself away from that ICO

Now, If ICO claiming itself other than security but falling under security by Howey test is also a red flag. How can you trust millions of dollars to an enterprise that is not able to understand such a simple concept?
I think if you pursue the ICO team on these question before investing then you will automatically filter out most of the scam ICO.

If business does not look legitimate then do not invest on it.Business is not legitimate then it will dupe you in the end.

If you find the company in the list, still check further what business company is doing because impressio.io was listed in UK but it business was software consultancy not the lending one.

Now , if something  does not fit on any of the above criteria( It does not fit US/Worldwide Security token) then you have list of guideline described below (you can use these guidelines to confirm your belief for the legit ICO too for confirming your belief too):

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

References: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_coinofferings
                : https://www.sec.gov/ICO
                : https://en.wikipedia.org/wiki/SEC_v._W._J._Howey_Co.
                : https://consumer.findlaw.com/securities-law/what-is-the-howey-test.html