Top 5 Signs of an ICO Scam

ICO which stands for Initial Coin Offering is known to be a crowdfunding method that is used to raise capital by cryptocurrency companies that are new to the market. People who are interested in supporting the project purchase some percentage of newly issued cryptocurrencies in ICO. They are mostly sold in order to exchange for other cryptocurrencies that are already established which include Bitcoin, flat and Ether. ICOs are vulnerable to fraud because they are nor regulated. Investors can determine whether an ICO is a scam by looking carefully at these Top 5 Signs of an ICO Scam.

1. A Website that is weak or a white paper.

In the case when starting an ICO campaign, a certain company issues a white paper and direct the investor to a website that is showing their project. If you are an investor you need to carry out extensive research about the company to avoid scam. Scammers will not publish their white paper or their website in order to Market their ICO.

2. An absence of Team Members.

In order to give the credibility of the project and develop trust, a white paper that is valid should contain the details of every member of the team behind the project. Scammers will not let any investors communicate with them directly because they would not want to be held accountable. They will not name anyone associated with their ICO.

3. Lack of a clear Roadmap.

Scammers will not provide the investors with chronological that are detailed outlining their development and funding goals because they are just planning to make quick profits and disappear.

4. Mining Structures that are Skewed.

If the team reserves some amount of pre-mined tokens is an indication that the project is driven by short-term financial again.

5. Uncapped Fundraising Goal.

The goal of setting up ICOs is to raise a certain amount of money to fund a certain project and launch its growth. A company this is legitimate will always include this goal on their white paper. In case an ICO is launched without stating these specific goals, it's a proof that they want to scam the investors.

In conclusion, If ICOs are used legitimately, they can be the best and cost-effective ways to raise startup capital. However, if investors and other affiliate marketers work and heed these signs of scams, ICOs can be a profitable investment.