Dummies guide to picking ICO scams
Jan 13, 2018, 9:00:04 AM Published By Wirex Team
2017 saw the introduction of many new cryptocurrencies join the market.We have no doubt that 2018 will be the same. We've put a quick guide together to help you avoid the scams. The recent craze of Initial coin offerings(ICOs) promising exponential returns on top of great blockchain solutions have proven hard to resist for investors and crypto-enthusiasts, alike. However as this method of crowdfunding is yet to be regulated, it comes as no surprise that it's also becoming popular amongst scammers and con-men. Let's take a look at some common alarm bells of questionable coin offerings.
What does the white paper say?If an ICO completely lacks a white paper or business plan, run for the hills. There ARE plenty of questionable projects which include a white paper.... But you should be asking yourself...
Does it make sense or does it sound like complete gibberish?Many whitepapers are blasted with the same language and buzzwords that other reputable companies use.. ... Sometimes copying word-for-word, parts of their white paper and replacing the plagiarised ICOs name with their own. Only the most vigilant and experienced researchers may spot this.
Inexperienced or anonymous teamUnless its 2008 and you are Satoshi Nakamoto, about to release the first crypto-currency into a world which wasn't ready, there is no real reason to be anonymous. Good projects are generally lead by experienced people, or advised by strong industry names and ICOs will typically list this information. If the information is too brief and no history can be found of their claimed experience, you should steer clear. This has prompted ICO scammers to take subtler approaches like fudging their experience and credentials to sound like they know what they are talking about. Onecoins CEO Ruja Ignatova claimed to be part of Bitcoins core development team, having worked closely with Satoshi Nakamoto, himself... #nocomment Confido's CEO, Joost van Doorn claimed to have worked for PepsiCo, EBay or Zalando - however no substantial evidence can be found to back such claims. Investors soon found out that Joost was not a real person. ToTheMoons ICO team, listed real people with valid credentials.. but these people had no idea they were part of the project. Sheesh that's identity fraud. With the internet at our finger tips, it's not hard to do a bit of digging. Verify the integrity of the team behind an ICO (if one is listed) by punching their name on google or searching for them on LinkedIn.
- Do the exist? Are they who they say they are?
- Are they actively involved in the project?
- Do they have the relevant experience?