ICO Scams
What is an ICO?
ICO stands for initial coin offering. If, for example a small business or startup has a great idea for a product or service and would like to securely streamline a digital payment system, they can launch a new digital coin to cater for this.
One requirement necessary to proceed with launching a new coin is the required capital to create and develop the currency. The startup has a few options at its disposal such as approaching a bank or presenting the idea to venture capital investors to raise the required capital. Another option however, is to raise the capital by launching an ICO which does not require the need to surrender any company ownership.
The process begins with the creation of a document that specifically details how the process will work. This document is referred to as a white paper which could appear on a professional-looking website and will detail the inner working of the idea and why it is believed to be a good proposition.
Once this has been established, individuals are approached to invest in the new digital coin. In return, investors will receive a certain amount of the new digital coin with the hopes that it will be received well, be used widely in the market and be in high i circulation. These factors will ultimately raise the value of the currency.
One important factor to keep in mind is that contrary to an initial public offering, commonly referred to as an IPO, investing in an ICO does not result in gaining any shares or ownership of the company. What you are doing is essentially investing in the possibility that something with zero value will gain traction and increase in value, therefore creating future wealth.
Who Can Launch an ICO?
Currently, there is very little regulation surrounding launching of new ICOs. This means that literally anyone interested in launching a new digital currency can give it a go provided they have the technical knowledge and understanding to get the new currency funded. At the moment, there is very little regulation that governs cryptocurrencies, and this can either work in favor or against investors interested in developing a cryptocurrency portfolio.
For the scammers and criminals out there, launching a new ICO is a very simple method to deceive unsuspecting crypto investors. This come as a result of the current lack of regulation as there are no major obstacles or hurdles that prevent these criminals from launching a fake ICO, marketing it properly, gaining big investment and then running away with the invested money.
So, if you are an investor and are really interested in investing some money in a new ICO, it’s important to ensure all due diligence is taken care of before parting with your money. The first thing to ensure is those involved in launching the new ICO can be accounted for. Anyone with an internet connection and a bit of time on their hands can pull up a generic online photo online and create a professional-looking website so it’s very important to thoroughly investigate new companies where you’re looking to invest. The first thing to verify is what sort of history the developers have with cryptocurrencies or blockchain technology. If you are unable to determine whether there is any history between the developers and the cryptocurrency world, it’s a sign to move on.
Identifying a Fake ICO
Currently, there are more than 4,000 cryptocurrencies currently available to invest in online. It is true that many of these crypto have very limited following or trading volume, however others come with a lot of popularity between certain communities of investors.
Due to the high number of cryptos that are available in the market, it is difficult to identify and select an ICO that will positively disrupt the blockchain market and translate to a great long term investment. Selecting an investment that was developed with criminal intentions reduces your chances of a sound investment to nothing. With that information in mind, the following are a few precautions that can be taken to help identify what could be the next great investment versus a scam that could leave you penniless.
Read the Whitepaper
Obtaining and studying a project’s whitepaper gives individuals a solid understanding and deep insight that go into the processes and motivations for launching a new cryptocurrency. The whitepaper should illustrate a clear understanding of the ICO, display originality and sound logic of the mechanism and processes behind the idea. Issuing and administration of the coin should be equitable and clearly laid out and should show that those behind its development are interested in long term growth and sustainability.
Scam ICO whitepapers can be identified by being disorganized, incomplete and difficult to read and understand. It is also possible from scammers to hire freelance writers to create a generic-looking document that has been borrowed from other sources.
Keep in mind, however that professional scams are still able to pull off authentic-looking whitepapers that create the illusion of professionalism that creates confidence in the investor. So, it is most important to really study the whitepaper and go through all the tiny details and smallprint to really identify what is on offer. Take note to clearly analyse components of the whitepaper including the roadmap, suggested solutions and writing style.
If it appears as if the write lacks clear direction and is throwing in fancy terms to attract new investors without thoroughly explaining the terms, consider it a red flag and consider researching further.
Verify the Repositories
Projects that concern blockchain technology are complex and require involved knowledge and understanding. It is therefore important that they display a level of proficiency with respect to code development and programming.
An ICO should therefore include open-source code repositories that displays the advancement towards developing the necessary blockchain technology. Progress can be a long and meticulous process which is most important for the overall success of the ICO. If code repositories are empty, it’s difficult to expect the ICO to maintain its promises and expectations going forward.
Assess the Promises Made
The old-age saying works for initial coin offering projects. If their promises seem too good to be true, it’s because it probably is. There are many companies and projects that have promised investors guaranteed, long-term and steady profits that have resulted in nothing. This type of system is unsustainable and is a telling sign that you might be dealing with a Ponzi scheme. Tread with caution when you come across promises of guaranteed profits and wealth.
Trust your Instincts
If there is something that doesn’t seem quite right about a new project or ICO, it’s always a good idea to dig deeper or walk away. Take any feelings of uncertainty or scepticism as a warning that the investment may be a scam. There is always time to research further, find online forums that discuss the ICO in question or even move on to the many other ICOs that are being launched that don’t leave you feeling uneasy and worried.
ICO stands for initial coin offering. If, for example a small business or startup has a great idea for a product or service and would like to securely streamline a digital payment system, they can launch a new digital coin to cater for this.
One requirement necessary to proceed with launching a new coin is the required capital to create and develop the currency. The startup has a few options at its disposal such as approaching a bank or presenting the idea to venture capital investors to raise the required capital. Another option however, is to raise the capital by launching an ICO which does not require the need to surrender any company ownership.
The process begins with the creation of a document that specifically details how the process will work. This document is referred to as a white paper which could appear on a professional-looking website and will detail the inner working of the idea and why it is believed to be a good proposition.
Once this has been established, individuals are approached to invest in the new digital coin. In return, investors will receive a certain amount of the new digital coin with the hopes that it will be received well, be used widely in the market and be in high i circulation. These factors will ultimately raise the value of the currency.
One important factor to keep in mind is that contrary to an initial public offering, commonly referred to as an IPO, investing in an ICO does not result in gaining any shares or ownership of the company. What you are doing is essentially investing in the possibility that something with zero value will gain traction and increase in value, therefore creating future wealth.
Who Can Launch an ICO?
Currently, there is very little regulation surrounding launching of new ICOs. This means that literally anyone interested in launching a new digital currency can give it a go provided they have the technical knowledge and understanding to get the new currency funded. At the moment, there is very little regulation that governs cryptocurrencies, and this can either work in favor or against investors interested in developing a cryptocurrency portfolio.
For the scammers and criminals out there, launching a new ICO is a very simple method to deceive unsuspecting crypto investors. This come as a result of the current lack of regulation as there are no major obstacles or hurdles that prevent these criminals from launching a fake ICO, marketing it properly, gaining big investment and then running away with the invested money.
So, if you are an investor and are really interested in investing some money in a new ICO, it’s important to ensure all due diligence is taken care of before parting with your money. The first thing to ensure is those involved in launching the new ICO can be accounted for. Anyone with an internet connection and a bit of time on their hands can pull up a generic online photo online and create a professional-looking website so it’s very important to thoroughly investigate new companies where you’re looking to invest. The first thing to verify is what sort of history the developers have with cryptocurrencies or blockchain technology. If you are unable to determine whether there is any history between the developers and the cryptocurrency world, it’s a sign to move on.
Identifying a Fake ICO
Currently, there are more than 4,000 cryptocurrencies currently available to invest in online. It is true that many of these crypto have very limited following or trading volume, however others come with a lot of popularity between certain communities of investors.
Due to the high number of cryptos that are available in the market, it is difficult to identify and select an ICO that will positively disrupt the blockchain market and translate to a great long term investment. Selecting an investment that was developed with criminal intentions reduces your chances of a sound investment to nothing. With that information in mind, the following are a few precautions that can be taken to help identify what could be the next great investment versus a scam that could leave you penniless.
Read the Whitepaper
Obtaining and studying a project’s whitepaper gives individuals a solid understanding and deep insight that go into the processes and motivations for launching a new cryptocurrency. The whitepaper should illustrate a clear understanding of the ICO, display originality and sound logic of the mechanism and processes behind the idea. Issuing and administration of the coin should be equitable and clearly laid out and should show that those behind its development are interested in long term growth and sustainability.
Scam ICO whitepapers can be identified by being disorganized, incomplete and difficult to read and understand. It is also possible from scammers to hire freelance writers to create a generic-looking document that has been borrowed from other sources.
Keep in mind, however that professional scams are still able to pull off authentic-looking whitepapers that create the illusion of professionalism that creates confidence in the investor. So, it is most important to really study the whitepaper and go through all the tiny details and smallprint to really identify what is on offer. Take note to clearly analyse components of the whitepaper including the roadmap, suggested solutions and writing style.
If it appears as if the write lacks clear direction and is throwing in fancy terms to attract new investors without thoroughly explaining the terms, consider it a red flag and consider researching further.
Verify the Repositories
Projects that concern blockchain technology are complex and require involved knowledge and understanding. It is therefore important that they display a level of proficiency with respect to code development and programming.
An ICO should therefore include open-source code repositories that displays the advancement towards developing the necessary blockchain technology. Progress can be a long and meticulous process which is most important for the overall success of the ICO. If code repositories are empty, it’s difficult to expect the ICO to maintain its promises and expectations going forward.
Assess the Promises Made
The old-age saying works for initial coin offering projects. If their promises seem too good to be true, it’s because it probably is. There are many companies and projects that have promised investors guaranteed, long-term and steady profits that have resulted in nothing. This type of system is unsustainable and is a telling sign that you might be dealing with a Ponzi scheme. Tread with caution when you come across promises of guaranteed profits and wealth.
Trust your Instincts
If there is something that doesn’t seem quite right about a new project or ICO, it’s always a good idea to dig deeper or walk away. Take any feelings of uncertainty or scepticism as a warning that the investment may be a scam. There is always time to research further, find online forums that discuss the ICO in question or even move on to the many other ICOs that are being launched that don’t leave you feeling uneasy and worried.
What is an ICO?
ICO stands for initial coin offering. If, for example a small business or startup has a great idea for a product or service and would like to securely streamline a digital payment system, they can launch a new digital coin to cater for this.
One requirement necessary to proceed with launching a new coin is the required capital to create and develop the currency. The startup has a few options at its disposal such as approaching a bank or presenting the idea to venture capital investors to raise the required capital. Another option however, is to raise the capital by launching an ICO which does not require the need to surrender any company ownership.
The process begins with the creation of a document that specifically details how the process will work. This document is referred to as a white paper which could appear on a professional-looking website and will detail the inner working of the idea and why it is believed to be a good proposition.
Once this has been established, individuals are approached to invest in the new digital coin. In return, investors will receive a certain amount of the new digital coin with the hopes that it will be received well, be used widely in the market and be in high i circulation. These factors will ultimately raise the value of the currency.
One important factor to keep in mind is that contrary to an initial public offering, commonly referred to as an IPO, investing in an ICO does not result in gaining any shares or ownership of the company. What you are doing is essentially investing in the possibility that something with zero value will gain traction and increase in value, therefore creating future wealth.
Who Can Launch an ICO?
Currently, there is very little regulation surrounding launching of new ICOs. This means that literally anyone interested in launching a new digital currency can give it a go provided they have the technical knowledge and understanding to get the new currency funded. At the moment, there is very little regulation that governs cryptocurrencies, and this can either work in favor or against investors interested in developing a cryptocurrency portfolio.
For the scammers and criminals out there, launching a new ICO is a very simple method to deceive unsuspecting crypto investors. This come as a result of the current lack of regulation as there are no major obstacles or hurdles that prevent these criminals from launching a fake ICO, marketing it properly, gaining big investment and then running away with the invested money.
So, if you are an investor and are really interested in investing some money in a new ICO, it’s important to ensure all due diligence is taken care of before parting with your money. The first thing to ensure is those involved in launching the new ICO can be accounted for. Anyone with an internet connection and a bit of time on their hands can pull up a generic online photo online and create a professional-looking website so it’s very important to thoroughly investigate new companies where you’re looking to invest. The first thing to verify is what sort of history the developers have with cryptocurrencies or blockchain technology. If you are unable to determine whether there is any history between the developers and the cryptocurrency world, it’s a sign to move on.
Identifying a Fake ICO
Currently, there are more than 4,000 cryptocurrencies currently available to invest in online. It is true that many of these crypto have very limited following or trading volume, however others come with a lot of popularity between certain communities of investors.
Due to the high number of cryptos that are available in the market, it is difficult to identify and select an ICO that will positively disrupt the blockchain market and translate to a great long term investment. Selecting an investment that was developed with criminal intentions reduces your chances of a sound investment to nothing. With that information in mind, the following are a few precautions that can be taken to help identify what could be the next great investment versus a scam that could leave you penniless.
Read the Whitepaper
Obtaining and studying a project’s whitepaper gives individuals a solid understanding and deep insight that go into the processes and motivations for launching a new cryptocurrency. The whitepaper should illustrate a clear understanding of the ICO, display originality and sound logic of the mechanism and processes behind the idea. Issuing and administration of the coin should be equitable and clearly laid out and should show that those behind its development are interested in long term growth and sustainability.
Scam ICO whitepapers can be identified by being disorganized, incomplete and difficult to read and understand. It is also possible from scammers to hire freelance writers to create a generic-looking document that has been borrowed from other sources.
Keep in mind, however that professional scams are still able to pull off authentic-looking whitepapers that create the illusion of professionalism that creates confidence in the investor. So, it is most important to really study the whitepaper and go through all the tiny details and smallprint to really identify what is on offer. Take note to clearly analyse components of the whitepaper including the roadmap, suggested solutions and writing style.
If it appears as if the write lacks clear direction and is throwing in fancy terms to attract new investors without thoroughly explaining the terms, consider it a red flag and consider researching further.
Verify the Repositories
Projects that concern blockchain technology are complex and require involved knowledge and understanding. It is therefore important that they display a level of proficiency with respect to code development and programming.
An ICO should therefore include open-source code repositories that displays the advancement towards developing the necessary blockchain technology. Progress can be a long and meticulous process which is most important for the overall success of the ICO. If code repositories are empty, it’s difficult to expect the ICO to maintain its promises and expectations going forward.
Assess the Promises Made
The old-age saying works for initial coin offering projects. If their promises seem too good to be true, it’s because it probably is. There are many companies and projects that have promised investors guaranteed, long-term and steady profits that have resulted in nothing. This type of system is unsustainable and is a telling sign that you might be dealing with a Ponzi scheme. Tread with caution when you come across promises of guaranteed profits and wealth.
Trust your Instincts
If there is something that doesn’t seem quite right about a new project or ICO, it’s always a good idea to dig deeper or walk away. Take any feelings of uncertainty or scepticism as a warning that the investment may be a scam. There is always time to research further, find online forums that discuss the ICO in question or even move on to the many other ICOs that are being launched that don’t leave you feeling uneasy and worried.
