Topic: How to combat the surge in scam ICOs (Read 2296 times)

Most likely this issue will not go away and no you will not give assurances that the ICO will make all commitments and not svalit with your money! you need to carefully disassemble the project in which you want to invest, then the probability is much higher)

there is a solution to reduce this problem

my sugestion:

create a group of DT members to inspect the

Announcements (Altcoins)

this group of DT members would have the difficult task of verifying whether there are real-life project team members and asking for the true contacts of ICO team members


having the true contact of the members of the ICO team is already possible to prevent them from stealing because we can arrest them

the best way is to both raise awareness and get a refundable collateral to be allowed to create an ICO topic here
lets say not 1 bitcoin,but 1000$ worth in coins,with 900$ refundable once ICO is complete,also have a standard mandatory warning for every ICO topic
but the most important thing is to educate people on what ICOs are and what  the risks and  rewards are for the participants
I can suggest a topic like the cloud mining 101 topic here: https://bitcointalk.org/index.php?topic=878387.1880 ,stickied
in a way,it was almost the same phenomenon,most of the cloud minings were scam with several legit exceptions

yes i agree on this idea. this will greatlty stop the ico from  scamming us , because these days there are many ico's on the bounty altcoin sections are popping like a mushroom and disapper instanlty like a ninja after they fininished to scam their investors and bonty hunters here who waste their preciuos time advertising their crap coin.

"How..." bit more info:

1. "South Korean Government to Ban Domestic ICOs and Bitcoin Margin Trading"
link: https://themerkle.com/south-korean-government-to-ban-domestic-icos-and-bitcoin-margin-trading/
"The government completely prohibits ICO (Initial Coin Offering), which is a fund raising method"
link: http://news.joins.com/article/21983687

2. from China "Illegal elements often use the trading platform to obtain the so-called "virtual currency" to engage in illegal activities, there is a large legal risk, the recent large number of trading platform for support for currency issuance financing activities (ICO) has been stopped by regulators"
link: http://www.nifa.org.cn/nifa/2955704/2955770/2967733/index.html

3. from UK (FSA) "Consumer warning about the risks of Initial Coin Offerings (‘ICOs’)"
link: https://www.fca.org.uk/news/statements/initial-coin-offerings

4. from USA (SEC) "The SEC’s Office of Investor Education and Advocacy is warning investors about potential scams involving stock of companies claiming to be related to, or asserting they are engaging in, Initial Coin Offerings (or ICOs)"
link: https://www.sec.gov/oiea/investor-alerts-and-bulletins/ia_icorelatedclaims

5. from Canada (CSA) :We have received numerous inquiries from fintech businesses and their legal counsel relating to ICOs/ITOs. With the offerings
that we have reviewed to date, we have in many instances found that the coins/tokens in question constitute securities for the purposes of securities laws, including because they are investment contracts."
link: http://www.osc.gov.on.ca/documents/en/Securities-Category4/csa_20170824_cryptocurrency-offerings.pdf

6. from Singapore (CAD&MAS): "The Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) have observed the emergence of initial coin (or token) offerings (ICOs), and other investment schemes involving digital tokens, in Singapore.... A consumer is exposed to heightened risk of fraud when investing in schemes that operate online or outside Singapore."
link: http://www.mas.gov.sg/News-and-Publications/Media-Releases/2017/Consumer-Advisory-on-Investment-Schemes-Involving-Digital-Tokens.aspx

7. from Australia (ASIC): "ASIC is aware of the global interest in the use of ICOs by businesses to raise funds. A number of international regulators have issued guidance on the application of their securities and financial services laws on ICOs."
link: https://www.asic.gov.au/regulatory-resources/digital-transformation/initial-coin-offerings/#what

The continuation will probably happen... enjoy
Have nice day to all "ICO Ceo"

Realistically I'd say the majority of ICO's right now are unfair or scams. There's so many I look at knowing that there is no way the people raising money could possibly give the investors any type of reasonable return for that investment. I don't see how a 1 bitcoin charge will do anything to prevent this, and it isn't really the job of a public forum to police this type of stuff, it never was done for any securities or ponzis on this forum.

Ultimately people need to be responsible for their own actions and do their own due diligence before investing. That being said a lot of this investment is just being driven by greed by people wanting to get in first to get a % token bonus, wait for most of these weak businesses to collapse. If I could bet money against 99% of the ICO's I would.

"Re: How to combat the surge in scam ICOs"?:

there is the way: http://www.newsbtc.com/2017/09/26/sec-opens-cyber-unit-govern-ico-projects-tackle-cybercrime/

"...Thanks to the launch of their new cyber unit, the SEC will police ICOs and other “illicit” blockchain-based activity"

I never thought that I would be grateful boys from SEC for something, I wish you fruitful work guys.

This is a good idea. A price for every new altcoin announcement thread. 


There are indeed some interesting projects.

Here's a metric.


Bitcoin will be less exciting without competition. They aren't really competition, they all do different things.

there is "great ICO story" on here: https://bitcointalksearch.org/topic/annwaste-waste-your-money-are-you-or-your-friends-stupid-enough-2191699 , you can join and make post, it will help keep topic on first page of altcoins anno.

some tweets as well: https://twitter.com/farelka9/status/908056850091986946  - important links in comments.

Successful? By what metric are you claiming success?

Of course, there is a lot of scams and people who want to get some money but among these projects, there are really interesting and successful projects. Or do not you think so?

by the regulation of them, that is just what happened on china in the last two days, i think that is the only way that scammy icos can be over. Also this is a good movement for banks to make a little fud over bitcoin.
but obviously the best strategy to avoid scammy icos is just by no investing, and do not feed the developers and founders by supporting them, without funds, they are not gonna do anything/steal from anyone.

Just ban ICOs. The huge majority are scams and hurt the bitcoin and altcoin economy, the little legitimate rest would be successful even without Bitcointalk.

Most of the ICOs I would consider a scam are these fly by night token ICOs. Sure, there have been a few ICOs that offered token payments that were legit but for the most part like Cryptodevil said these guys have a whopping 200$ at most wrapped up in an idea and have no intention of following through on promises. They are offering tokens basically because there's no risk to them this way.

A team spends 100-200$ and gets some wallets made and tokens produced. Then they launch their ICO(paying bounties with tokens) and if they don't make any money they can still pay out tokens and only lose the 200$ investment. Who cares if it gets listed or not in their opinion. If they don't make money obviously it's not gonna be listed. I get contacted by at least 5 companies a week that have this strategy going on.

As far as making ppl pay a 1btc listing fee, that wont exactly solve the problem completely as others have stated. A company can spend 1btc 100x in 6 months on 100 campaigns. As long as they make more then the 1btc fee they paid, they still profit and still spam the fuck out of the forum.

I personally do not touch the token campaigns(least not very many unless i trust the team), but there are plenty of new managers out there willing to take on any project offered.

My suggestion to go a little further than others suggestions would be to not allow bounty campaigns period. If they want to do airdrops sure, but all campaigns must pay in an asset that's listed on an exchange in order to be using this forum+the 1btc list fee.

I doubt that changes much either but i'm sure it wouldn't hurt

Given that scammers are now realising that we can routinely post warnings in their unmoderated threads, which alerts non-forum users reading it who are oblivious to the negative trust rating they wear, moderated threads are being used instead.

This means they can keep deleting our warnings and non-forum users won't see the red trust text alerting them to the scam accounts.

The best solution to this problem would be for Theymos to set Default Trust-issued ratings to be visible even when viewed by guests. I don't imagine it would be that difficult to implement, as everybody has DT as their default from the get-go and have to actually opt-out of it if they don't want to see it, so making it visible for non-members, too, makes sense, no?

The idea is inherently flawed and will not work with the current state of things here.

Because you are a newcomer who has no idea what he/she is talking about? Spend some actual time here before posting more bullshit. Thanks.

The people being real does not guarantee legitimacy. There is no way to know when we have cases of people who nobody has heard of. Occasionally scammers slip up and use images that are found somewhere online, and get exposed.

The forum and the forum.

Hmmm, is there any way to know if those behind the ICOs are legit o not? Maybe during all those numerous ICOs before, there are personalities that were involved in shady and scam ICOs, so if they will be part of new ICOs then someone can raise a red flag for that one. There is too much ICOs today and reviewing each and everyone of them is an essential part in understanding on what is their purpose,as well as if investing in the said ICO will be worth it. But the biggest issue is determining if the ICO is a fraud. Making ICO pay before the start is ok, but to whom they will pay? and who will regulate?

But you do understand that I made this impulse for the sake of the community not because of my self, I do not have nothing from it personally... And I will certainly not come up with a FULL developed concept ALONE!

And why you think things must go like you suggest? Well nvm, I see you are not a big help to this topic! Sorry again to distract you, and just let it go please...


P.s.: Making a fee for ANN is something good I can agree to it...

I thought it was doable, or was that only when others do the thinking for you?

Create a proposal alone then come to the public with it and discuss.

Your idea/suggestion is flawed and easily got shot down, which you see as hostility. That's how weak the thinking behind it is.

Ya sure I will do it alone.... Why not...  How is about making a public discussion and take other options on board... I dont know why you hostile, but ok... Sorry for distracting you trying to give an impuls!

Democratic voting by who? Farmed accounts, shitposters and spammers?

This would not be worth the effort/reward.

Everyone says something like that, similarly for the trust system. Come up with a fully detailed solution that works both in theory and practice, and then we can talk about whether it's doable or not.

1. Democratically voting members into the committee ( min 20 people to avoid corruption)
2. Make a fee for it and pay committee members and infrastructure
3. Needs much more thinking to find a proper working solution. But I believe its doable!
4. It can be never regulative more a added trust factor at the end always investor decides by himself where to invest under which circumstances...

But as said, its just a thought....

That will not work: 1) Hard to choose said members. 2) Said members would have to *waste their free time* to essentially be doing someone elses homework. 3) Prone to abuse and corruption. As we've seen with other members in the past, they're willing to sell themselves out for a penny (e.g. Quickseller bogus escrow).

Should be mandatory IMO.

---

No answer, as expected.

Maybe a community driven audit service?
https://bitcointalk.org/index.php?topic=2135456.40

+

Some ANN fee

with that can we report and paste the links of those face ICO bounties here in order for them to shut down I've been scam several times in joining bounties

I think nobody can set some rules like that unless theymos would like to do so but if you really want it to implement here well it can be another source of corruption here and paying a 1btc payment can make those scam Ico's legit and instead they will get few bucms here they can actually gey millions since they can abuse that 1 btc posting pay rules.


Remember scammers can invest for there schemes and I think paying for allowing a thread is useless.

We can't stop scamming and the main thing to battle that is to gave awareness and not by putting some rules that can be abuse by the both parties.

No, I already said that the payment of bitcoin to post an ICO thread WOULD NOT equate to it being considered trusted, it would simply be a means by which we can throttle the flow of new ICOs being launched through bitcointalk, thus reducing the numbers to a more manageable rate for investigating and evaluating.

The bitcoin collected doesn't even have to be paid to those who expose scams, we just need a process implemented which would serve to reduce the number of threads being posted.

It would be absolutely critical for there NOT to be a 'verified' or 'approved' label for ICOs, as that would be a legal minefield and likely open to abuse.

And what if the project who invests 1 BTC ends up scamming users as they are now considered verified and trusted ICOs? Most of the ICOs these days are cheating with respect to the team members, having fake linkedn profiles and those who have a strong team too end up not paying their investors and participants. There are some forums that require verification of users before they start selling their services/products. That would be much more beneficial but again comes the question, who will verify them? We need some reputed members who can take up this task to stop these scams.

I'm not really sure if paying 1BTC will solve the problem.
Because: Pay 1 BTC (earn 'trust') --to gain--> 100+BTC --> abandon everything with 99+BTC profit (== reeeally good ROI x'D)

To protect newbies against potential scam ICO, I think there should be a standardized checklist.
The more an ICO fulfill the checklists/expectations (like post verified linkedIn founder pictures, proper whitepaper, opensource wallets, etc) .. the higher their score.
If they can't do that, automatically treat all low-score ICOs, rushed ICOs, as 'potential scam'.

The only problem with this is that not everyone goes through each of the pages for an ANN or bounty thread. Some may only go through the first and last. The only way the full impact of the huge red letters could be conveyed is if it had been written on every page of their thread.

Another problem is that it still doesn't combat the mass amount of scam ICOs as they are still allowed to post their thread. Then cryptodevil would still have to investigate all possible scams that are being posted. As stated by cryptodevil, the whole point is not to eliminate it (although would be nice), but to reduce down the number of scammers. That will allow more time to be spent on the harder criminals who have a bigger budget to spend on their scam idea.

This is equally my concern because we have seen several amount of dollars dedicated to such and even hire campaign participants to even be paid more than the average payment by others. Yes it will reduce the amount of people involved in ICOs as it will discourage people who dont have the capital wherewithal to make things happen but at the same time give room for big scammers. Another way to look into it as my suggestions is that if possible before an ICO open, a period of 2 weeks should be allowed for anyone to vet the activities even before launching.

Now that you put it that way- true, it would greatly help the reduction of cheap ICO scams. Still, maybe not 95%, but it would certainly help clear out more time to focus on harder, more dedicated scammers. In terms of value and funds saved through this introduction, I can see the 95 come to play.

Also, if an ICO is clear scam and they have run off with a large sum of money, how often is legal action taken? As the scammer/ scammers may be overseas and that can complicate the problem even more.

No, it would be about Bitcointalk regulating the abuse of this forum by scammers, that's all.

I am new to cryptocurrency. I'm curious that if bitcointalk charge 1BTC for posting an ICO, does it mean that bitcointalk regulates the crypto world?

The idea would be that 95% of the ICO scams currently being started would be blocked as many of them are literally thrown together for a couple of hundred bucks of expenses at most and wouldn't have the means to raise several thousand to pay a posting fee for an announcement thread. Stopping the plethora of cheap-ass scammers would at least lessen the number to a more manageable degree and allow time to investigate the more devious and determined fraudulent ICOs.

It isn't to say that anybody who paid the fee would be considered legit, no, it is simply to throttle the flood of ICO threads sufficiently that we can at least have a fighting chance of exposing the criminals and the con-artists.

I too would have to agree with this. There are a massive amount of scam ICOs today, (while being new to the community, I have read through most of cryptodevil's recent threads and I have to say it is very interesting).

However, a problem I can see with this is that if people are setting up a scam ICO, they are most likely going to devote to it as it is certainly a lot of work to make it seem legitimate. Therefore, I am sure that they are willing to pay even a 1 BTC fee with hopes to raise more.

Look at LustICO for example, they have already raised more than 1 BTC and have also been labelled as scammers. Even if they had paid a fee, they would still have surely gone a head with their operation. In the end, I think it is a great idea, but I do can't really see the 95% reduction being a reality, however I may be wrong.

While being new to this community: agreed. The amount of scammy or just super unprofessional ICO's is astounding.

The idea of charging 1 BTC per ICO thread is interesting, but has some flaws too: first of all, how to administer it? Either, there would have to be manual approval (which might take a long time, if a lot of requests come in), or a complete payment gateway would have to be set up (which I find hard to believe, considering the simplicity of the forum software).
Then there is the question of how would the newly-financed task force operate? Would it be pre-approval, or removal of scammy ICO's after the post has been made? And who would be the judge on borderline cases?

But in general, yes, I believe the current Altcoin forum is almost anarchy, and something should be done to rein in the scammers and spammers. I like the idea of fixing some rules on terminology and minimum standards. I also have another idea: how about banning completely new acounts (such as my own, actually  ) from posting in that subforum? So that, for example, only accounts with 100 activity or more post there?
This might root out some of the throwaway spam accounts that are created purely for spamming up one ICO and dissapear afterwards.

False equivalence. Beggars are not pretending to be innovative entrepreneurs seeking millions of dollars in investment funding.


No, my avatar has remained the same for a number of years and, btw, it's "could have", not "could of".

I don't think there's much one can do. It is what it is.

I was watching a Crypto conference and they said that something like 200 ICOs are launched every month. Or some insane number. And that right there it the problem, people trying to make money by attaching a coin to any little idea, and that leads to campaigns.

It is what it is, people are desperate, and so there's not much one can do.

It's like being annoyed that you see beggars begging for money when you go outside? What can the begger do? Completely give up and rot in a corner?

Edit: Did you just change your avatar OP? I could of sworn that it was a gif of a guy right before I click reply.

It's like it was a few years ago with all the shitcoins that were created. Most of them were clones and just died. Some of them are still around and can be traded on Nova, Yobit and stuff. Unless the ICO is something truly innovative or is finding a new way to tap a successful existing market, just stay away.

Agreed to as well!

Bitcoin exchanges charge atleast 3Btc to have their alt coin listed to some of these exchanges so why not here to have them shown to the bitcointalk community.

Call it a royalty so to improve the quality of the site.

But really to keep the bad seeds out of trying to scam the membership here.

I think even with a fee there'd still be a lot of scam ICOs if someone is interested in scamming people for hundreds of thousands of dollars a one time fee isn't going to stop them from doing it. I think the best way is to do it is to make the ICOs have to be verified by the admins or something proving that the dev team are reputable and can actually do what they promise.

I agree. A template term sheet with typical properties would both simplify comparison by participants and act as a quick sanity check for moderators too.

Works great on a torrent boards where a lot of similar releases get posted and otherwise need to be carefully sorted like "is this a reencode? what is the quality? what are the languages/subtitles etc?"

You really can't. See, it is impossible to know if any ICO is a pump and dump or actually real. You just need to trust in the developers and hope it turns out OK.

I think that even with good intentions, there will always be someone complaining about a decision that forum administration makes. Right now we don't ban scammers for fear of an incorrect judgement, why change the way threads work? Plus 1BTC is still a *lot* of money, and I doubt they want more complaining about how 'the forum is rich make it more better' or 'halp badbear stole my btc and i have no ico thread'. It will just make people more upset in the end, it is up to the end user to judge if an ICO is a scam or not.

I think a reasonable fee is potentially a good idea but if the fee were too significant that could stifle promising concepts from reaching the investment community.  Or, alternatively, it could cause ICOs to shift their announcements elsewhere.

One thing that I think is sorely needed among these ICOs is a standardized list of terms.  Some of the ICO whitepapers I've read have such horrible presentation and lack of concrete information that I can't imagine anyone investing anything in them, regardless of the potential of the concept.  As someone coming from an environment where I have reviewed many (far too many) IPOs, the quality bar of ICOs needs to be raised.

Huge warning with red and bold text is better idea than ask 1BTC for every ICO thread since scammer could earn more than 1BTC in scam ICO. Ban all ICO thread might works just like when altcoin giveaway is banned from this forum.

Charging a fee would definitely reduce the sheer number of garbage ICO's, but this doesn't solve the problem at all.

This forum is a Bitcoin forum, and from there I believe it will really help improve the overall quality, and extremely reduce (or even completely wipe off) the amount of scam ICO's by getting rid of the altcoin section entirely.

I know the altcoin section generates a whole lot of traffic, and ad slot revenue, but things have gotten extremely worse in the last years, and that's mainly altcoin related ~ certain problems require extreme measures.

It's a good idea, and reducing scams is obviously a good thing, I'm just not sure how well it would work in practice. The admins would have to have the infrastructure set up to offer specific vetting services that would have to be the same for all projects in the interest of fairness. And what happens when a legitimate project falls through the cracks and is somehow labelled a scam when it's not? Or, even worse, a scam project is vetted as legit by the admins and people end up losing their funds?

I just don't think the admins here would be willing to take on that kind of risk/hassle.

totally agree with that,
it's an excellent idea for me,it will prevent those shit ICOs without proper project and preparation to come up.
mods can not deleting the thread because it will affect this community and they might be attacking the mods which is will make this community to suffer and this the other solution to prevent those shitty project to come up.
while this community get a benefit from their existence.

There are an absurd number of ICOs being launched through this forum these days, far more than we can keep up with and expose. I don't see it getting any better all the while the scammers have a platform such as this, which allows them to use hacked accounts and bot-posting to set up multiple ICO threads for free.

Somebody came up with an excellent idea on the matter:

Thoughts?

Personally I think simply introducing a fee to start an ICO thread would result in an immediate drop in the numbers we're currently seeing. If you've got a legit operation you sure as hell can afford a bitcoin or two in order to collect millions in ICO funding.