Cryptoslate’s Sam Town lists seven signs of an ICO scam. While the ICO ecosystem may be a multi-billion dollar industry, it’s also mostly unregulated and ICO scams are becoming more common. This lack of regulation has allowed the market to be plagued by fraudulent platforms and “ICO exit scams,” leaving regulatory bodies around the world scrambling to develop a functional framework for control, writes Town.
Town also mentions LoopX scam, which resulted in the loss of more than $4.5 million USD of investor capital after its creators pulled a disappearing act.
Many of these scams operate similarly to multi-level marketing or Ponzi schemes, such as Onecoin, which duped investors out of $350 million USD and culminated in the arrest of the creators.
While these fraudulent platforms succeeded in separating unsuspecting investors from their capital, they weren’t particularly complicated, nor were they hard to spot as potential scams. Performing due diligence when assessing initial coin offerings is an essential element of the investing process, but is commonly overlooked by many investors.
Seven key signs are:
1. Poor Online Presence
2. Guaranteed Profits
4. Empty GitHub Repositories
5. No White Paper, Bad White Papers, or Blatantly Plagiarized White Papers
6. Shady Premines
7. No Roadmap or Unrealistic Roadmaps
You can read about the key signs if you click here – https://cryptoslate.com/seven-key-signs-ico-scam/