ICO scams are increasing on a daily basis. Initial coin offerings (ICOs) and token generation events (TGEs) offer token buyers a wide range of opportunities to engage in the crypto marketplace, but the growing popularity of ICOs and the often-technical nature of the blockchain ecosystem has led some token buyers to unwittingly contribute to ICO scams.
Warning Signs of ICO scams
The first and most blatant sign of an ICO scam is that the 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.The website maybe privately registered with no known owners or admins. If the team are unwilling to identify themself, be very cautious about being a part of it.
Another sign of ICO scams is that the developers are unable to clearly articulate a valid use for it or they set unrealistic goals for example if they claim to generate ROI revenue through a “software bot and naturally no evidence of the bot exists or they have the standard ICO Ponzi model, wherein ROI payments are made in USD. Run from this!!
Any new initiatives, where money circulates back and forth, are a classic lure for scammers, Initial Coin Offering being no exception. Retrospectively, con artists have announced ICO campaigns for rogue projects, got money raised and vanished. This is why it’s imperative for early backers to be on the lookout for red flags when considering an investment option of that sort. Some of the most defiant incidents listed above might give you an idea of what typical ICO scams look like. Just like any investment undertaking, Initial Coin Offering implies risk. This is why the rule of thumb is to treat these cryptocurrency startups with a reasonable degree of paranoia and weigh up the pros and cons before ever considering participation.