Common ICO Scams to Avoid: How to Protect Yourself in the Crypto Market на сайте Nedvio

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Initial coin offerings (ICOs) have emerged as a popular way for cryptocurrency startups to raise funds by issuing tokens to investors. However, the lack of regulation in the crypto space has led to many ICO scams where investors lose their money to fraudulent projects. This article will discuss the common types of ICO scams and provide tips on how to identify and avoid them.

Exit Scams

Exit scams are one of the most common ICO scams, where project developers make off with the invested funds after the ICO is completed. The team stops all communication and disappears with investors’ money. According to a 2018 Satis Group report, over 80% of ICOs in 2017 were identified as scams.

To avoid exit scams, thoroughly research the team behind the project. Check their backgrounds and try to find information on their previous projects. Also, only invest an amount you can afford to lose as there are no guarantees.

Fake Teams and Advisors

Some ICO projects list fake team members and advisors on their website to appear more legitimate. The photos used are often stock images or stolen social media profiles. Carry out image reverse searches on Google to verify if the photos are authentic. Search for the names online and on Linkedin to see if the team really exists.

Also, be wary if the advisors are not mentioning their role in the project anywhere else online. Legitimate advisors tend to advertise their involvement to enhance their reputation.

Plagiarized Whitepapers

The whitepaper outlines the project’s vision, technology, token economics and roadmap. Fraudulent projects often plagiarize content from whitepapers of legitimate projects and pass it off as original.

Use plagiarism checking tools like Copyleaks to verify if the content is copied. Also, look out for formatting inconsistencies and changes in writing style within the whitepaper.

No Working Product

Most ICO projects only have a concept outlined in the whitepaper and no working product yet. However, some promise a working platform but have nothing substantial to show investors.

Ask for a prototype or demo of the product to see if real development work has been done. Also, find out if the concept has any patent or legal registration attached to it.

Unregistered ICOs

Legitimate ICOs are legally registered as a company and follow KYC/AML regulations for investor identification.

Check for the company registration number on the website and ensure KYC procedures are followed before contributing funds. Unregistered ICOs with no investor verification should raise red flags.

Impossible Returns

Some ICOs promise ridiculously high returns to attract unsuspecting investors. Guaranteed monthly returns of 20% or more should be seen as a Ponzi scheme.

Always research the feasibility of the project’s business model. If the returns seem too good to be true, they usually are. Invest based on the project’s merits, not on marketing hype about returns.


While ICOs present an exciting new way to raise funds for crypto projects, many fraudulent ICO schemes have emerged looking to take advantage of investors. By identifying red flags like those discussed above, you can avoid falling victim to ICO scams. Do your own research, follow investment best practices, and only put money you can afford to lose into ICOs. With some caution and common sense, you can reap the benefits of investing in this space.

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