Topic: how to identify a scam ICO project (Read 387 times)

It's interesting if ICO is a scam what's the future options for the dev team? I mean they're hiding they were into the team that made a scam? Also I believe the scam doesn't mean everybody in the team are bad, just a couple of people may be scammers but that will definitely damage the others' reputation

Hello!

It is actually very hard to identify a scam ICO project.
You could verify of course the team, the whitepaper, theirs accounts on social media....etc, but in the end, the project still could fail or simply the team could scam you.
My personal measure is to invest as low as possible and just wait for the exchanges.
In order to invest, PLEASE do your own holy and blessed research.

Best of luck!

Check out the team, whitepaper, see if they are actually putting in the work, if they are scammers they probably have no knowledge of tech or limited one and won't spend money on the project but only create a false site and say they already sold 10m usd worth of tokens on the first day, its just bullshit, also many of the ICO websites that are out there that are legit, actually have ugly websites but great teams and marketing and strategy plan, i reccomend checking out AirP2P it looks very solid and the team is amazing, the dude who is the co founder even ran a crypto hedge fund in the past so he knows alot about the market

To be fair, you can always smell a rat when you are involved in a project; just try not to ignore the warning signs and bury your head in the sand. As a newbie, there is a good chance you will get burned once. But learn from this and improve you decision making skills. In the end, you will simple be sifting through only the strongest ICOs so the chances of being taken for a ride are greatly reduced.

i believe there are still good ICOs there, its just that the hype caused by the various scams have somehow caused others to be fearful about it.  ICOs are good especially if it's a project that has worthy or relevant objectives.  Sadly, scammer also take advantage of these good and famous ICOs through attacks like phishing or brandjacking, which if a user is not careful and vigilant, would leave him hurt in the end by losing his investment.  It also leaves the ICO company hurt as well.   Which is why we need solutions that will help us determine or counterattack these scams.  It's a matter of having that technology that will help the community protect itself from these scammers.

The unfortunate thing is that scam projects do exist in crypto and they can be very cunning my disguising this insidious intent by many actor spinning the web of lies and also by having a flashy website which makes them look the business. The only approach is to do your research and approach every investment opportunity with caution. only invest what you can afford to loose.

Just visit their website and see for yourself if they add some effort in it and gives all the information that is needed to see if they are legit. You'll know it basically soon when you make it a pra practice to do research before joining in any ICO.

A lot of them will be scams, but to know more and to prevent from joining, I suggest you should look at their background really carefully. Achievements, process, system, and also the CEO and developers. This will give you a heads up on what are you getting yourself into. But be careful, scammers are evolving.

Scam projects will often make bold claims about their product even though said project offers nothing new or disruptive. It's not likely that a certain blockchain platfrom or cryptocurrency will end poverty, fix global warming or replace the internet. This can also be truth for how they expect the community or markets to respond to the product. If someone claims their cryptocurrency will replace bitcoin,get a disproportionate amount of users, or increase by 100x in the price charts, you can add that project to the scam list. One of the major risks is the exposure of ICO to fraud or scam.

While I've posted this in another thread that asked the same question, I'll copy it here:

Airdrops, Bounties, Free Forks, etc - there are a lot of new coins showing up with really attractive ways to convince people to get involved and talking about them. However, as we all know, there are plenty of "pump-and-dump" scams, private key thieves, and even some (potentially) exchange-sponsored forks with difficult rules that reward only those who are insiders. So what can you do to protect yourself and ensure that what you are getting into is a worthwhile, safe offering?

 - Did you check out the team? Can you find post histories on accepted forums, or verified contributions to the community, or linkedin profiles that have plenty of real connections?
 - Whitepaper. First things first, without one, don't consider investing. Almost no exceptions to that rule. If what is there is hastily written or is overly marketing focused instead of technical, that's not a whitepaper, it's a sales brochure. Consider that carefully.
 - Have you seen the code, gotten on github and looked at the history? We want to be sure it is really there and that the differences from forked coins are well understood.
 - Check out what others are saying. Bitcointalk, Slack, Telegram, Discord, etc - there should be real conversation and real questions answered.
 - Depending on the timeframe, a little Google-fu. Is it really new? Maybe try google trends, or news. Look for autocomplete terms like 'scam.' But then also do some searching to figure out where else the coin is mentioned, or the team members, or the concept that is their supposed differentiator.
 - Some red flags in the business plan, like significant pre-mining, or large amounts of "advisor" tokens, etc may indicate a quick pump-and-dump.
 - Does the development roadmap seem feasible? Are they making significant progress on it, or is everything post-ICO? Same questions about the business plan.

Thanks for this post. It helped a lot for the beginners. I learned as well

I think you can see on the team and their's KYC on LinkeDN. If project have enough information about CO-Founders this project shouldn't be a scam.

*Dont rush to take the step
*Make a strictly research about their project
*look to their community and project management team
* read the white paper ( spot out the points if it correlates)
*identify the team members if they have epresence and duration of membership on that platform and acheivements, have they involve in any project


These are the things that i identify as a newbie give as help to you.
#crytocephas

*Make a strictly research about their project
*look to their community
* read theur white paper (how they can help in our community)
*observation for they ongoing project

These are the things that only i know when i want to invest my money in ico,hopefuly it will give an help to you.

So hard to figure out if an ico is scam or not on its first day of advertisement. You need q or 2 weeks to figure it out.  Theres no progress on thier ico sale, no updates on thier  social media accounts , no support on telegram group.

This is my best advice -

1. An inexperienced team

If the team is comprised of individuals that lack experience or gravity in the crypto sector, then this can be a warning. The presence of venture capture capitalist known in the field should be a big green light – without these individuals, then this could be cause for concern.

2. No use case for the token
If the token can be replaced by Ether or BTC, then it’s not really needed. For example, in my early investing days I sank some investment in a HR tokenised platform. It had its own native token on the platform to buy services and also then added BTC and ETH. Effectively, there was no need for anyone to use their token. In the end, it was vapourware – all investors lost hard.

3. Poor community on Bitcointalk or Telegram
Community can make or break a coin. When times are tough, does the team display the integrity and grit to get the job done. How enthusiastic and committed are the community members? If the team convinces others that they are in it for the long haul, then this is a massive plus. This, in the end, is your judgement call.

4. No signs of a major exchange
This one is a tough one. Platforms during the ICO are not allowed to talk about exchanges for legal reasons so you have to consider many threads to take a view on whether it is likely to make it onto a big exchange (consider community size, backers, whitepaper, team aims). Getting on the Binances and Bittrexs really does benefit the early investor.

5. Public sale is too long
It’s better to raise 100% of $15 USD than 50% of $50 million USD. I’m not a fan of these mega long ICOs that tie up your investment. Quality ICOs over an acceptable time frame work best.

If you get scammed, don't give in. Use it as a learning curve and move forward with a greater knowledge.

Usually whitepaper is not well structured, I also notice Telegram channels are left unmanned with almost zero interaction with members. Any most points have been listed above

Use ico rating webite for standart to evaluate and choose best ICO. To avoid scam ICO project you should know how professional the team, how ambitious the project, etc.

Here is ico rating website :
https://icobench.com/
https://icodrops.com/

 Undecided  Scam is really a lot, the only way to protect yourself is to choose carefully. I'm  working with the German project Vreo.io, maybe someone heard. They are doing dynamic in-game advertising and going to create marketplace for developers and advertisers.  the interests of all parties are taken into account. Developers of small games can attract investments and create high-quality products, for advertisers this project will be useful due to the expansion of advertising opportunities and selected target audience, and gamers will be able to receive quality products cheaper, besides they also receive income from the ads they watched, without interrupting the gameplay. Here is their link at bitcointalk https://bitcointalksearch.org/topic/ann-mtc-token-sale-vreo-embedded-in-game-advertising-2886707
There is enough information on the Internet about the criteria for choosing ICO. The main ones
1. Uniqueness, necessity of idea
2.Clear target
3.Scalability
4.Transparency, properly allocated budget
5.Concept
6.Team
7.Distribution of tokens
In any case, when choosing ICO, carefully read the whitepaper, there all the necessary information

You must check carefully information of the team behind, (for situation they scam) If all investor know the time of the ICO that they join, i think it's really hard to go away 

Here are certain steps you can take to check whether an ICO is a scam -

1. Are the team members on the website and included in the whitepaper? Do they have Linkedin profiles and an online presence? If the team members have funny names and the pictures look too perfect, check and double check on the authenticity of the profiles.

2. Read the whitepaper carefully. Is the writer making far-fetched claims? Is the technical architecture and tokenomics included in the whitepaper? Is the business idea expressed simply enough or is it a buzzword salad?

3. Check for code. Is the code on github during the ICO? If it's not, the dev team probably has no intentions of building the product. If the code is there, has it been audited by a third party?

4. Are the members of the team available on Slack or Telegram to answer your questions?

It is very difficult to find out a real and successful ICOs. There are a lot ICO here. And every day a lot of ICO are coming on the market. But all are not real. Some are scam and fake. So if you want to find you a scam ICO you have to see their whitepaper, roadmap, team member. Most of the scam ICO don't have an escrow. On the other had a lot of successful ICO didn't have any escrow I have seen. So you have to see carefully to find out andy scam ICO. Becuase scammer is very clever.

There are 3 categories :
Scam projects ( easy to catch ) : poor idea , poor white paper, bad quality website, fake team, lack of information.
Legit project, but not worth investing : Some projects have honest team, all necessary information, but their business will not succeed.
Legit projects and worth investing : Have good idea, strong team, ready product or code, creating new technology etc ...

I have to agree with you 100%.  As a translator for ICOs, I felt the same way.  I've translated dozens of whitepapers and most of them are poorly written.  I won't repeat what you said, but once you're read the whitepaper, everything will become clear as to whether or not you should invest in the ICO.  Take it from me as a translator.  Whitepaper is the first of many obvious signs of scam.

I would say that the best way to identify if an ICO is a scam or not is to read and research everything about them.  First, read their whitepaper in its entirety.  One thing that you will notice with almost all of the ICOs is that their whitepapers are littered with grammatical errors and appear as if it was put together like a scrapbook, some appear to have been written by a high-schooler.  Look for fluffs and words such as the mention of the phrase "price appreciation", "guarantee", "put flag on the moon", "the first, the only" etc..  Whitepaper will tell you all kind of tell-tale of an ICO.  It should be written for an average reader, not filled with marketing gimmick mumbo jumbos or words you do not understand as if they're trying to impress you.  

Once you're finish reading the whitepaper the first time, read it again.  Then move on to their team, see who they are and what they've done.  Look at their Linked In.  Then look at the website and everything else.  If you've completely satisfied, then you should consider if the project is truly disruptive, revolutionary, or technologically advanced.  Avoid ICOs that mention Amazon, UBer, Netflix etc..  If an ICO is a good ICO, there is no need to psychologically try to manipulate people, all they need is just to present an idea.  That's my take.

Pretty complete responses already. I would just add: If they do not have a working demo better avoid this ICO. In 2018, a white paper and a roadmap should not be enough to launch an ICO. Need to show much more than this. Just my advice.

1. The Developers Are Anonymous
The first and most blatant sign of an ICO scam is that the token’s developers are anonymous or otherwise-unknown. While it’s true that the creator of Bitcoin — a pseudonymous individual or group operating under the name Satoshi Nakamoto — did not reveal his true identity, he was able to this because he created a network that did not depend on the trustworthiness of a central authority. This is not the case with ICOs and TGEs. By holding an ICO, a startup is asking token buyers to trust that the developers will deliver a working product instead of running off with their money, so the team should be willing to back up its promises and claims with verifiable identities.

If a team is unwilling to identify itself, token buyers should be very cautious about contributing to the project. While there may be valid reasons to desire this privacy, it is far more likely that their purposes are nefarious. PlexCoin, for instance, declined to reveal the identities of its team members, obfuscating the fact that one of its organizers had run afoul of securities regulations in Quebec on several occasions, both before and during the PlexCoin ICO.

2. The Token Does Not Have a Clear Use Case
Another sign of an ICO scam is that the developers are unable to clearly articulate a valid use case for the token. The token should serve a key purpose in the startup’s platform. If it does not, the token will not sustain its value over the long-term. Related to this problem are tokens that advertise themselves merely as digital currencies without offering any real innovations or improvements upon existing cryptocurrency technology.

3. The Whitepaper Sets Unrealistic Goals
However, even if the token does have a clear use case, token buyers should be wary of startups that advertise overly-optimistic roadmaps. If the whitepaper sets an unrealistic development schedule, it either means the developers are using deceptive tactics to attract token buyers or they lack the necessary experience to give a sensible scope to the project. Either way, this does not bode well for the success of the project and its corresponding token.

The ICO landscape has changed significantly since the early days of crypto and as you said, there are a lot of scams out there. Investors must practice vigilance, they must exercise their due diligence and research thoroughly before investing. Research the project, the development team, assess their growth potential, their potential for mass adoption, look into their social media presence (does their community look legit or paid?), overall you should be looking at how transparent/honest they are. In the end, even with all of this research, you still can't be 100% sure of the project's future or validity--that's just the nature of the business. If you believe in a project, though, invest in it. If you'd like to learn more about ICO's feel free to check out our blog, we expand on everything you should know before participating in an ICO: http://bit.ly/ICOGuide

Cheers!

Check everything on their website. Their team, their whitepaper, everything.

But you know what the secret tip on not getting scammed by ICOs is? Don't invest in ICOs. Simple as that. Get in on the reputable coins instead. If you REALLY still want to invest on a certain ICO though, probably just put in small amounts. Just so you don't get rekt if ever the ICO you invested on ended up being a scam.

2017 is a successful year, with many hot projects, maybe x5, x10, x20 ttaif investor's account
but in 2018 there will be many ICO scam projects, investors need vigilance