Hey everybody.

Today we’re going to talk about ICO scam red flags that is, how you can develop your own feeling, your own sense, and intuition when it comes to deciding whether an ICO is legit or a scam, unfortunately, we see many scams in our space when it comes to blockchain projects in general.

This is for several reasons one reason is that we have many new investors joining the field, many new investors who aren’t aware of blockchain or about cryptocurrencies, they don’t really understand how it works they are only learning but they are interested and so they try to invest in an ICO.

RED FLAG DETECTION — CRYPTO ICOs

Here below I have stated a few red flag detection techniques and what you need to do before investing in any project for preventing getting scammed.

Of course, if you are knowledgeable and have experience and then you are investing, it is harder to trick you but if you’re just new, if you’re just starting out you might become a victim. You would be vulnerable to scams just because you lack all the knowledge that you need in order to be more prepared and it is natural that everyone has been a new person in the field at one point in time but it is important to educate yourself and this is why I’m writing this post because I feel that I want to share my views and some metrics with you that I use whenever I evaluate ICOs.

Anonymous Team — Red Flag

Whenever I look at blockchain projects, I try to research for some specific parts first and see for red flags, one of the biggest red flags for me is when a team is anonymous.

You should always try to find out exactly who is behind the certain project that you are interested in and always try to find out the company behind the project and always try to find out the address of the company because if they are transparent they should share their address, are they afraid to share the address? Also the names I want to know exactly who the CEO is, who the CTO is, and so on.

And so forth there is no reason to not share the names, also sometimes I try to reach out to the team and try to get on skype or on telegram and try to talk directly to the founders because it is one thing to read about the project on their website, to read on the whole marketing effort they’re making and to get the information from there and it’s a whole other thing to talk to the founders to talk to the founders directly about the same things that are said in the marketing websites or on the white paper and so on and so forth but you get a whole different perspective when you hear it from the founders.

So you can develop your own gut feeling when you have your conversation with the team members. Try to compare the stuff written in the whitepaper to the stuff they talk to you, you maybe be able to find points which were exaggerated for marketing purpose or points they were hiding from people.

Try to find out their address of the company and if you are having trouble finding it out then it is a red flag because they should be transparent, they’re raising millions and millions of dollars there is no reason why they shouldn’t share this information so an anonymous team is a big turn-off.

Vague Whitepaper — Red Flag

The second Red-Flag I would like to mention is to about the white paper that is if you read the white paper and if it is extremely vague and you really don’t the see the project joining the pieces together, you don’t see how it is going to be implemented, no in-depth explanations, no important details then we have to see this as a red flag.

Most of the ICO scammers have whitepaper as that, they are not engineers and they don’t care about blockchain, centralization, technical implementations and so on. They are just trying to make the whitepaper look legit and making the project look a really good project but when you read the white paper you might see a different picture.

If you’re not careful and you read the white paper it might sound good to you, but be critical and look for details, demand details and try to find out exactly how they’re going to implement it and if you cannot see it in the white paper try to reach out and make sure that the founders themselves know what they’re doing, is it only an idea or can they actually implement it because the blockchain project without any implementation and only an idea is worthless. Ideas are really worthless it’s all about the implementation.

So if the white paper is vague and you have a hard time contacting the founders and getting details on the white paper it is a red flag and you should be careful about it.

Too Small or Inactive Community — Red Flag

The next red flag has to do with community namely if you see no community. If you go to their respective channels on telegram, slack or anywhere else and you see very little activity then it is worrying well because if a project has a huge community and many people are asking questions many people and are wondering things, many people are engaging with the founders it means that the project has some kind of responsibility.

I mean if you have so many people in your community and they’re all curious and they all know a bit about you, they all know the address of your company, they all know exactly where you live, they all know your name, it will be harder to scam because now you have thousands and thousands of people who know so much about you so if the founders are anonymous and there is no community this is a huge red flag even if the founders are not anonymous but there is no community it is also red flag because I personally want to see that many people are in this, many people are engaged in this, many people know who the founders are, many people know what the ico is about and what is the company behind the ico is and so on and so forth.

So I hope you see where I’m going with this if there is a lot of community if there is a lot of people who are interested in this project if there is a higher chance that more people will take some kind of legal action or pursue the scammers if this ICO turns out to be a scam. So a large community, of course, makes me personally feel safer.

No GitHub Activity or Project Activities Updates — Red Flag

The third red flag has to do with GitHub activity namely when you try to find out exactly how the project is moving forward when it comes to coding, when it comes to actual implementation of the idea. If you go to GitHub and see no activity at all then it is a red flag because the scammers would most probably not spend a lot of energy on actually coding because they know that people will most likely not check it up, most people do not check it up and it is extremely important to do so, so that you are aware and you are not fooled by just a nice white paper or their marketing team.

Always check GitHub, now in many cases, you have ICOs that haven’t even started to code and this is, of course, making this whole investment riskier and you ideally want ICOs who have some kind of GitHub activity who can show you that look we’re pushing each and every single day.

ICO Scam Trend 2018 — Red Flag

Finally I want to bring to your attention a phenomenon where we will see more and more scams in the ICO space namely that scammers will be creating fake ICO websites more, the reason why I think this will accelerate in 2018 and why I think this will be a trend for scammers this year is because we will see more and more established businesses doing ICOs, for example, you see telegram doing an ICO, Kodak doing an ICO and you already see fake ICO websites claiming to be the Telegram/Kodak ICOs and taking people’s money.

If we see more and more established companies doing ICOs we might also see more and more of such scam websites because the scammers know that they can use these big names in order to attract people and most people will be misled and fooled by this.

They know that people will not check everything when it comes to the website, they will not check the SSL certificate and this is what I want to really really advise you to do when you’re investing in an ICO, click on the little lock button on the top next to the domain name because if you check the SSL certificate you know who is behind the website and you know that the website is coming from the company that you are investing in and if you’re just on the website and they do not have this little SSL certificate lock and when you click on the lock you see some random business name that is not the company you want to invest in you should be extremely careful and I strongly advise to stay away from these scam websites.

So I hope you learn something I hope you now have a better feeling for what is a good project what is a bad project and I hope you are more aware and know how to check a project for red flags. It’s all about awareness, it’s all about knowledge it’s all about being as careful as possible.

Crypto ICO space guys its taking wild turns, stay aware and invest in the best. :)

Disclaimer:

• I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor.
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