Beware Of ICO Scams

 

ICO, or initial coin offerings have been a hot commodity lately. Right before year’s end, Bitcoin, and blockchain technologies were the only thing you heard about; because of this, more companies are jumping into the online cryptocurrency market.

However, with this also comes the potential for fraud and scams on the web, and there are quite a few to watch out for. So much so that the SEC (securities exchange commission), and federal government agencies, are warning those who are considering to purchase these ICO offerings, to think twice, and do their research to avoid a scam. These are a few signs to watch out for to avoid getting caught up in a scam, or fraudulent ICO.

Guaranteed Profit Margin

No company will ever guarantee you will turn a profit. Whether it is in stocks & bonds, commodities, even purchasing something that carries virtually no risk, like a bank CD. If a company guarantees you are going to make profits, and makes outright claims of how much you can expect to earn, or guarantees there is no risk of loss, avoid them at all costs.

Whitepaper

If there is no white paper research written, bad white paper copy, or plagiarized white paper, this is a serious sign that fraud is looming ahead. A whitepaper is the most important element of any initial coin offering (ICO); this presents the outlines, what it hopes to achieve, what you can expect, possible fluctuations, and so forth. It breaks down distribution models and potential earnings based on investment amounts. If an ICO doesn’t have a white paper, you can be rest assured it is a scam.

Online Presence

Poor online presence is a telltale sign of a scam or potential for fraud. If a company isn’t readily traded through ICO platforms, this is a problem. A team page is something a reputable ICO company will have; however, also look for LinkedIn pages, and ensure the CEO has their profile listed on the site. Do your fact-checking, compare companies, compare listing prices, and stay abreast of the different signs of fraud, to avoid losing your money in one.

Roadmaps (lacking or unrealistic)

Most ICOs will provide investors a roadmap of what they have achieved to date, where they plan on going, and plans for future growth. This is of high importance to you as an investor. It gives you an idea of how the ICO has performed to date, and what you can potentially expect, based on investments. Furthermore, if the roadmap simply tells you the ICO is being offered and has no future plans, you can determine if it is worth investing in.

Example Of a Fraudulent ICO

Blocksims ICO is attempting to launch a fraudulent ICO. They stole their fake business model from a legitimate company’s ICO. They have used fake profiles for their team members, and phony pictures they have stolen online. Blocksims scam ICO is easy to spot, because their have been several investigations, and their scam has been widely publicized. Just do a Google search for “Blocksims ICO Scam”. And see what you find.

Conclusion

There is always the possibility of fraud and scams in the market, especially with new ICOs. You should be familiar with signs of a scam, how they occur, and how to avoid them, before you think about investing in one. The more research you do, and the more time and effort you put into learning about what you are investing in, the easier it will be to avoid the scams like Blocksims.