How to identify ICO scams?

October 4, 2017

Today if you are looking any ICO related phrase, you may still find information that is related to an .ico file format, a type of a file that has been existing for over 20 years. Yes, we are talking about the icons used by the operating systems to make your folders and other shortcuts look beautiful. However, in 2017 the abbreviation ICO has gotten itself a completely new meaning – Initial Coin Offering. It is a process through which a company issues some sort of tokens which are sold on the market at the flat rate during some limited amount of time. This way of investing has opened up the doors for small companies to start raising the funding, while it has also given a great way for the frauders to launch various ICO scams. Today we are going give you a few actionable tips on how not to be an ICO victim, let’s go ahead.

Research the opinions online

There are quite many people on Reddit and other networks and sites that are discussing the potential of the ICOs – be sure to check them out. There are also websites that are specialising in reviewing ICOs, this will be definitely handy for you to check the pages that and see what the experts say in their analyses.

Verify the project’s start date

There is lots of marketing bullsh*t around the ICOs. People have figured out that it makes much more sense to invest money into advertising and PR to attract investments than to invest into developing an actual service or a product. You should certainly avoid such ICO scam companies. The best way to do it is to check when the company has actually started working on the project and if it has started working at all. If the job commenced only after (or close to an ICO’s date), then you should definitely avoid it.

Check legitimacy of the operations

A rule of thumb is rather simple – a company that looks into long-term existence will never engage in any sort of illegal activities. Recently two countries (China and South Korea) and making them completely illegal. Hence, it might be a good idea to write a company from a newly registered gmail email box asking how you can safely invest in their ICO provided that you reside in one of the two mention countries. If the company starts giving you tips – better stay away. If the company lets you know that you are not eligible for an investments – they might be actually running a legitimate business.

Invest into the ones you believe in

Finally, there is now an ICO for nearly anything. Yet not all of the ideas are profitable. Not for all of the ideas there is a demand. Don’t only base your decisions on the whether the ICO fraud takes place, but also judge the overall chances of the company to make profit.