Topic: How to spot an ICO SCAM (Read 9084 times)

I just go to the website of the ico just to see what the coin to se what they are offering the investors. Then I look at their social media profile to make sure that they are the real faces and to know what they have worked on previously before working on the coin. Then I read the whitepaper, if they are lax on it then it is a fake one, legit ones want to make a real impression

good question, I took part a couple of times in companies that were successful in all the paramitres, but in the end it turned out to be mashenniki, I don’t know how to make the right choice today

This is my redflags about scam ICOs :
❌ The first thing you see on their websites is 'Buy tokens now', '50% discount ending in x days', a count down timing to the end of ICO (means they only care about the money, not the project itself)
❌ Display all the ICO ratings from ICOBench, TrackICO etc
❌ Heavy advertising on ROI (how much you can potentially earn etc)
❌ No contact details (or fake)
❌ Whitepaper focuses on ROI instead of the problems and proposed solutions
❌ Fake team (please Google or LinkedIn search to verify the team members)
❌ The idea itself doesn't need a blockchain but they die die want to use blockchain (to grab money, duh)
❌ 'Buy' advisers (those advisers serve only 1 role, put their LinkedIn profile on the website, and that's all). If the advisers are 'advising' 40 and 50 projects at the same time, I don't know how they can add value to the projects.
❌ Parent company is failing or running out of money so they pivot to blockchain to raise fund and stay afloat

When the development team are not following up what they have promised such as coins on time and schedule for distribution.I think It easy to determine it by asking frequently at their telegram page and if they wont answer directly or it takes days for them to reply

You need to verify the project with different things, like the ICO reviews, experience of the team and their website. This can help you with giving an idea about an ICO.

For ico scams they do not really put a lot of work into the project because they know that they will not be sticking around for long so they are always unprofessional looking and when you are reading their whitepaper you will observe that there are a lot of typos in the document, that is what I mostly look at when looking to invest in an ico

this is a very mathematical theory, it's probably true this theory, I will try to calculate the possibilities. very helpful if this theory is created and can be understood by everyone. thank you

There are a couple of things that you could look out for to spot an ico scam
You should always look out for the team members, make sure that you can put a face behind the project, without a face then you should be very wary
Make sure that you confirm and crosscheck any information before you invest your money into the project
Look at the previous places they have worked at

There are many metrics to use. One is to look at their linkedn profile. Their whitepaper can also be a tell. In my experience, when the text in the whitepaper is not selectable, most likely the project is a scam. Pretty absurd but it happend to me in translations many times.

There are a lot of ways to identify fake icos but you need to take measure to protect your investment from fake icos

Don’t Disclose your private information- Participating in ICOs or airdrop is not a bad thing, but before having proper information, never disclose your private information like wallet information, number etc.

 Check and verify the name of the Founders and Co-Founders- Every Initial Coin the offering has a founder or a co-founder, but when the ICOs which are Fake put the name of founders who do not even exist. Before doing any activities related to ICOs the individual needs to check the names of the concerned person and check the person’s virtual credibility.

  Reliability of ESCROW- ESCROW is an online wallet which preserves the coin unless and until the transaction is done. But when we are doing a transaction we rely on any of the wallet platforms and the end result is the money is debited and the deal is unsuccessful: this means the ICOs are fake. So, while involving in certain constraint make sure they use ESCROW for offering ICOs.

 Get ahead with an email confirmation- Generally, a real airdrop shares the individual a confirmation mail, if you are not getting a confirmation mail on your registered mail id neither any OTP, you should walk –off from the deal.

source- https://cryptomaa.com/btc/protect-your-money-from-fake-ico-and-scam-cryptocurrency-projects/

in my own opinion i cannot determine if that ICO is scam because i thinks  all coming from this forum sites is filtered there application before  they introduce to the market, for bounty campaign participation or investment.we only know if the campaign is scam or  fraud if they not give a payment to all the participant or the investor in the end of campaign.the only things should i know by put the name of that ICO in the google and  put a word scam and search if that campaign is legit or fraud.

Check their identity, I mean the team members. Check their CV, linkedin pages etc.

This will give you a correct idea about the rest of the project. Also check their company license and registration number if possible.

I love this methodology, and I am sure it works. However, as you see, people — I mean dishonest ones — are ready to risk and invest into developing their fraud sites to steal much money further. They become more and more sly, and it is more difficult to catch the scammer. 

The team is probably the main factor to look at before investing in a ICO.
The whitepaper is important as well. Does it look doable? realistic?

thank you for your tip, I will try your tips to choose ICO

There many more thing to consider. Not just because they are fuzzy and decentralized team we can conclude that it is a scam. Sometimes it is not just successful. We can't easily judge such things so i suggest to have just a deep research about an ICO before anything else.

Solid advice. This is also true for new shitcoins that turn into pump and dumps. Take ETHD. What a fuxkin mess that was. No white paper and traded up to $5 each!

Research to the bottom and all the darkest corners of the project - team members, social media profiles, etc. That's how I am doing it. And that's waht everybody who is contemplating investing big money in an ICO should be doing.

The things I am looking in every ICO in which I invest is how old is the domain if it is 2-3 months old, so for me is created just for the crypto-hype and it is probably a scam. Also I look at the team and what kind of people are in it, if they have background for something familiar or something like that, so they probably are good and the project will scale. And last but not least - the smart contract, I am looking for github history and committed smart contract on their repo, just to see how it is written.

i think the actual future use of the coin/token is the most important thing

How do you view Envion's ICO? See https://bitcointalk.org/index.php?topic=2348435.0;all
Looks legit...

Very good list, Also check out for those that have huge number of contributors but little amounts bordering on 0 amounts just to pump their ICOs.

As i am having quite active in finding good ICO, one of the best factors to determine ICO is good or bad is by the team dev. For example, we look at omisego, we have vitalik as advisor. And in fact, this factor determines how hype the ico is. A lot of people decide to join the ico is by the team members. And with hype, this will allow investor to make money out of it. So if you invest in OMG, you would have x24. Another example is knc which is x5.

my personal opinion is that 90% OF ICOS is just unsuccessful and failed with stupid ideas is not a scam. but there is 5% that is a scamers also there is a 5% which is a successful  and you have to make a good research to find them , do not trust anyone just trust the idea if it makes sense only .

Look into the prior history of the team members. If they have not been around for a long time into social networking websites and have new accounts in websites like linkedin, it should be an instant red flag.

In my opinion, the most important are the project's prototype. It should work with some basic functions.
A MVP worth more than a fancy white paper.

I hope this helps: ico.scam.network

These steps of spotting scams are static. I prefer interactive methods. I like to ask as many questions as I can directly devs/managers 

Be active on forum, take others opinion on board and do your research but ultimately I think alot of it comes down to gut feeling. It's also worth taking into account risk of investing in ICO vs investing once they hit the exchanges.

E.g. Monetha ICO price is now around 3/5 on the exchange so massive drop already.

Kyber on the other hand is now 5x on exchanges. So can swing both ways.

Check if the team is legit and if they habe linkedin pages

Hello, everyone.
I am just wondering if there is any industry known company that does audit of ICOs? Such a company could be beneficial for both ICO issuers and for the users who want to invest. I know that the very idea of decentralization is going against such a company, but still it will be interesting to know if such companies exist. If not - that is another idea for a startup.

These are good and simplified guide, but we must always remember that we must trust no one. We have always been warned, we must think twice and investigate first before we engage in any form of investments.

Success of any blockchain projects (Or any other) mainly depends on Team (Developer & User Community) behind it rather than technology it self. The risk is very high if you can't verify Identity and credibility of the core team behind it.

ICO is very simelar to IPO in stock market , there many fraud companies come with IPO same things running here in ICO too, this post is very useful for spotting ICO scam 

Thank you very much for writing down that idea ! It seems interesting - although for me a big question still persists - as in how important is communicating the identity of a team in such a project? The pure nature in crypto is the same and it is yet to decide how much trust we can/should put in individual human beings in such a trustless environment.

It's like an IPO.
http://www.investopedia.com/terms/i/ipo.asp

 I know Stratis was such a scam. If you put $1000 in it ended up being worth $1,000,000 recently. Such a scam. 

This is possible because its easy to create a drama as long you do have the funds to sustain it and make it more believable on the community and with those innocent eyes would really got decieved and tend to jump up without more investigation or research on a certain ico. Ann threads arent an assurance that particular ico would be succesful and seeing on the past you can see they do have really convincing words/anns/papers/roadmaps but still end up on scam.

Thank you. They buy because often in the first hour there is a spike in price which some people bet on, in other cases its not a spike but permanent high Price. Its speculation with a grain of Lottofeeling .

an escrow it not the only thing. there have to be milestones to be reached before the escrow releases some of the funds to the devs.

Great discussion! As for me, escrow and much discussion on this forum are basic principles to be a good ICO project. Even I can't buy the tokens duiring ICO for some reason, I will buy some coins when they are on exchange platform.

Initial Coin Offering

Why do people buy a coin during Ico? Why not wait until it is listed at a decent exchange?

Can someone please tell me what does ICO mean when written out?

I=?
C=?
O=?

i googled hard but foun only crap(islamic caliphate) and "ICO scam" but no explainations

thx in advance.

Maybe your opinion is very reasonable, from here if you want to see the ICO project is a fraud, because from here it seems that he does not use escrow and manager if there is an ICO project like this that I think you already know so you do not have to participate in it. To invest in this ICO because it is clear, that this is a fraud.

As many have said, there have been many ICO's that launch with anon devs and with multi sig instead of escrow... but i get where you are trying to go though

That's really useful for me when dealing with an ICO. I think no escrow, too much tokens held by the founders and less discussion on this forum are enough for me as a reference not to give a shot to this ICO.

Yes I also wanted to expose those scam ICO and to tell you exactly how to spot them, you must see to it that there is an escrow with the project. With that certain information for reality check for the ICO, we can determine that they are not scamming people. Although it's not that easy to determine those wrong doers, well it's our obligation to know and to research the background and history of the project you are getting involved with. Scammers were really annoying and they don't deserve to be successful of their negative plans to gather victims on their ghost projects.

Judging which is a scam ICO is not that difficult. You can determine whether the ICO is a scam with these simple ways. Check their roadmap. Some scam ICO don't have any roadmap to present and that's suspicious. Some scammers use some pictures which is not them. They are just steal a picture just to present to us. It's better if you check their profile or better if you search them on google. Sometimes, they don't use escrows. Escrow is a must when creating an ICO.

This discussion is an eye opener for investors who are looking for safe investments platforms to invest their hard earned bitcoin. I hate scammers,so I want them exposed. Thanks for a great work

These are all good pointers and newbies in the world of crypto currency investing should take note of all this,
transparency really play a huge part of investing in this Ico,am surprise that many still falls for a newbie starting an ICO.

It was decreasing the chance of succeeded scam ico. But I must have believed if that's also not sufficient in my mind.
They can pay someone or group for making a drama.
When just put some word in his position, it may deceive the community.
This the central point of me.

I agree with the most of the ansers here. Also take note and monitor the ANN thread of the said coins. Also, background check the devs,his previous projects and people behind the project.Also check the roadmap. There many factors to be considered.

Nice set of points there and everyone can take that as a reference before dealing in an ICO.

Anonymous developers, self moderated threads and no escrow are enough for me as a reference not to give a shot for the upcoming ICO's. I don't get easily at the future projects and developments without any further strong foundation of it.


I get the picture but still it's better if we have some pre insights about the upcoming ICO.

PM me or post here I will review them.

What do you mean? I had some experience with scams... I know how it works and I know scammers well. I don't want people to get burned because it hurts the scene so I learn how to prevent/avoid investing in scams.

Agreed on most points. Especially about manipulations in ICOs (self-buying) and releasing funds by reaching milestones.

I think 2 broad types of ICO scams

1. the deliberate stealth ICO - usually the best to be in on. There is some tech behind them and can be made to look interesting and could have some actual value to the crypto community. The ICO will be under the radar to a degree and the devs and pals will hoard most of the coins. The promoting phase comes later whilst they suffocate supply whilst pumping/driving demand. You will see for some reason these coins sell for X sats value at ICO and then are suddenly being sold off for X x 10, 20, 100 sats even before reaching an exchange. Whether this is actually a scam is a matter of definition they are not promising anything they will not provide but they are not ensuring a fair balance level of entry to all persons.

2. the blatant scam ICO - low or no new/useful tech - promote lots and  raise as much as possible. Then dump the BTC and provide nothing of note.


All ICO's on here are open to huge manipulation since you can not see who is buying what.


POW with a fair release protocol will always be a fairer way of initially distributing the coins. With anti instamine measures in place it will always be fairer than an ICO conducted on this board as they are conducted right now.

If they need to raise funds for development upfront and widely advertised ICO . Then a POW phase of at the minimum of 50-75% for the rest of the coin distribution. The ICO funds should be held in multi sig wallets and only released to them as milestones are hit.

I understand the argument that POW will centralise eventually to those with the cheapest electricity. That to me is nothing compared to the manipulation that can happen behind the scenes with ICO's conducted here.

Simple.. it's an ICO.

They are by design scammy.. nuff said.

All your doing here OP is trying to make *some* seem better than others.
I wonder why ? 

Its true some traders love the pump and dump scheme. When ICO has
been released some traders does the pump dump scheme because
thats the way they earn huge profit. And, thanks for the information
Ive read here on how to spot an ICO Scam. Because when I see an
ICO project I always loves to invest always but since Ive know how
to spot an Ico here gives me to rethink before investing.

Good methodology, at least it's a good trial dealing with ICO scam issues and it encourages people thinking carefully before investing in any ICO.

it is simple don't be greedy and stop investing in ICO because they are all scams. and the fact that one or two of them goes higher than it is supposed to go and makes you profit doesn't make that one or two coins not-scam but it was a lucky break.

One of the reson is some traders love pump and dump,because there's money to be made here,they work like an hyip,the earlier you get in the more profit,you're going to make,so some traders hop from one ICO to another.

Greed i have the two example for you and hoping if you can reviewing those ico project because in my mind it's familiar with bought account or farmed account in some threads on meta sections.

I guess there are two are running by bought account in my mind.

These are good guide,people are now learning,they want roadmap,projects and return of their investment ,you can easily spot a pump and dump coin because it's obvious by the way they hurry setting up their ico with nothing to show.

I think escrow would do the trick don't you think? after all what good is escrow for if can't prevent scam or money loss?
Also the seriousness of dev team, yes team and not just one person.

I think you got it more accurately on the last point. Real people, they have a recognized network eg people or relationships, visibility in forums/social networks where you can see thier worldview/thought process, and it can be peer reviewed. This essentially falls under "team" in the sense that although we all love anonymity/pseudonymity, when it comes down to investing money. it human to know who you're dealing with and who is leading the ship and if you find them credible. some things will never change.

One distribution method repeated often in ICO scams is for the dev to do a signature campaign with scam ICO coins as promised payment. That gets him free publicity and the rest of the ICO coins are sold in two batches, one with escrow, and the other without escrow. What the dev wants is bitcoins from those who buy without escrow. At the end of the ICO he disappears with those bitcoins, the signature campaigners don't get paid, and the buyers who used escrow get their bitcoins back but lose the escrow fee they had to pay.

I rate the half with escrow, half without escrow model as equally likely to be as scam as the no escrow model.

Self moderating threads is a double edged sword indeed. You may think it's a good idea to keep trolls away, but other people might thing what you are doing is shutting down the opposition which may be calling you out on your ICO bullshit. It is very difficult to maintain a balance... how do you control the trolls without a self moderated thread, and how do you keep people happy if the thread is self moderated? (because they may think it's on purpose to shut down legitimate critics)

This threads is very useful for the people who want to invest and don't know which ICO to choose. for the guy who said ICONOMI is a scam, ICONOMI is a great project and will never be a scam, you can't say that just because the price is low, and the investment fund still in the wallets, you can check that.

Of course it's more complicated. Like escrow releasing 100% funds towards devs on token distribution is bad escrow. Good release conditions is when parts of funds get released on development progress: 20% on tokens distribution, 50% on beta release, etc.

Iconomi is not a scam in anyway. You will see that soon.

Even then if a coin goes for escrow they can scam and you can see latest in ICONOMI ICO it went highest and after that now the Developers are enjoying the ICO money giving all shit ideas and peoples are still believing them.

Firstly, it absolutely does for ICO topics but ann topics. According to my experience most of scams were self-mod. Secondly, it is supposed to be used for the first glance when you either want to get a quick review or have no time for a deep research (like finding nature of removed posts).

Well, this is disputed I guess. Legit projects tend to have a team with real members that also had experience in other start-ups. Unlike them scams can't have a team which members have linkedin, github, and other profiles.

There are several issues with this way of assessing an ICO.

Firstly, the idea of 'self-mod topic' scoring on your list 5 points doesn't make any sense. As you are all aware, this forum is full of idiots, trolls and otherwise people with nothing sensible to say just clogging up the threads looking to increase their post count. So, some level of editorial control should not be a measure of anything. You should rather look at the nature of the posts getting deleted. If the mod deletes proper questions and critical posts that have some substance then you might draw your own conclusions. If the posts being deleted are just mindless drivel, then all the better for the thread.

Have a look at the GitHub and the code and see if it's just a basic clone or something a bit more planned and thought out.

Also, there are clear issues with posting your true identity online. It could be for tax reasons and for privacy so this is not a measure of an dodgy ICO. Do you research in what is being offered, it makes no difference if the dev is called Yolobeast of John Smith.

Hi guys, I want to share with you my simple methodology (beta) of spotting ICO scams.

The methodology

There are criteria with various risk points. Summarize all the points of the criteria that the ICO meets to get total score. Total score represents a risk grade on which you can lean to take a risk or not.

Scam points and criteria:
1 point: minor suspicions (for each)
3 points: anon devs; no code snippets, videos, or beta; rushing
5 points: unrealistic goals; fuzzy whitepaper; self-mod topic
10 points: bought account; no escrow

Risk and total score:
low (0-5)
medium (6-10)
high (11-15)
very high (16-20)
extremely high (21 and more)

Example

Let's imagine there's an ongoing ICO of Supercoinxxx in which you want to invest some money.

The topic is self-mod (5 points) with devs that have unrealistic goals (5 points) like creating a decentralized stock market in 2-3 month and a fuzzy whitepaper (5 points) with no technical details. Also you found two minor suspicions (2 points) based on your experience. Which gives 17 points in total. Based on that score you conclude that risk is very high and skipping this ICO.

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Updated: added "no escrow" criteria.