Marina Baslina


3 Warning Signs You’re About to Invest in a Scam ICO

Thinking of investing in an ICO?

There’s no question that every investment holds some risk, that’s why they have potential to earn you money. However, due to their nature, ICOs can be particularly volatile — and because of this volatility, have the potential to be extremely profitable.

That’s why you need to perform due diligence before you invest a dime into an ICO.

If you’ve never heard of an ICO, an ICO is an acronym for Initial Coin Offering. An ICO is in some ways similar to an IPO (Initial Public Offering), in which a company sells off shares in their business to investors. However, IPOs are heavily regulated, where ICOs are not.

In fact, ICOs bypass the centralized, regulated fundraising process required by banks or venture capitalists altogether. That’s why an ICO can be so profitable — and so risky.

During an ICO, a company sells their crypto tokens, typically in exchange for either Bitcoin or Ether. The money is supposed to be used for further development of the project. However, more than one startup has taken the funds raised during their ICO, and disappeared. Their projects get abandoned, and the investors have nothing to show for their money but worthless tokens.

That’s why you need to be extra cautious and do your homework before even thinking of investing in an ICO.

ICO Conditions Are Ripe for Investors to Be Exploited

Just like with many other revenue-generating ideas, there are certain unscrupulous people who are ready to take advantage of naive investors. Their goal is to gain as much as possible, in any way possible and as soon as possible — at any cost.

And because of the incredible earning potential of ICOs,the conditions are ripe for naive investors to exploited by less than ethical business people.

Despite the efforts made by various authorities to protect investors, loopholes still exist. You need to have a keen eye to avoid those projects that aren’t genuine.

Here are the indicators an ICO could be a scam:

1. Unrealistic Promises

What does an investor want in the long-run? To make money out of their investment of course! Because investors want to get a good ROI on their money, they can get a little too greedy. This leaves them open to scam ICOs.

If you see an ICO with a tempting taglines such as, “Our coin has 1000% growth!” watch out. If something seems too good to be true, it probably is. Such astronomical growth rates are not usually sustainable long-term. Be wary of projects that over-promise.

2. Whitepaper

How detailed is the startups working plan? Most ICO scam projects will create a whitepaper with few actual details about the project. Legitimate projects will lay out in great detail how they will use investors’ funds to develop their technology.

A scam ICO will only provide the shallowest of details of how they use investor’s money to develop their project. This is a sure sign that they can’t be trusted.

Make sure to thoroughly read through the whitepaper of any ICO you’re thinking of investing in. If the details of the project seems sketchy at best . . .watch out!

3. The Team

Are the real names of the team provided? If you can’t find any information or section dedicated to their team members or the profiles provided seem a little too generic, be sure to do some deep research first.

Counter-check team members’ names with respect to their stated experience or ability to deliver. If you cannot find any background information on team members, you’re likely looking at a scam.


Prior to making any cryptocurrency investment, check for reviews made by investors on websites such as, or Customer reviews are good in pointing out shady projects. The information might save you from becoming a victim of another ICO scam.

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