Fraudulent ICOs: How to identify?

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Hello, today I like to share this important information about Fake ICOs.

Initial Coin Offerings (ICOs) quickly became the preferred method of financing for many of the startups in the crypto world. With them, a project can raise funds by creating a new token ready to be sold at the market price, the value of which will be backed in the future with the value of the project in question, when it is launched.

The problem arises that literally anyone can launch an ICO, as there is hardly any requirement. This gives the opportunity for many scammers to set up fraudulent ICOs, backed by projects that, in reality, they never plan to complete, since their intention is only to escape with as much funds as possible.

 

The ingredients of a fake ICO are often excessive publicity, a vaguely described project, ads too good to be true, and anonymous or unreal administrators (they tend to put famous people as part of the project when it is not true).

It is worth noting, in addition, that there are also parodic ICOs, such as the Useless Token (Useless Token), where the same administrators warn that no return should be expected and all investment will be lost. In this case, it cannot be considered a scam, as parodic ICOs do not usually hide their nature.
Examples of these events are Confido, with losses of 370 thousand dollars for the buyers of the token; Centra Tech, which even featured advertising for Floyd Mayweather and raised more than $ 32 million in its ICO; and what is perhaps the biggest scam in the history of cryptocurrencies: Modern Tech, an alleged company that, through the ICOs of the supposed iFan and Pincoin tokens, managed to steal up to 600 million dollars.

 

Take care with Fake ICOs. 

cheers