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The majority of the world’s financial markets are so tightly regulated that fraud is increasingly rare. Enterprising criminals have turned to cryptocurrencies which are mostly unregulated across the world.

So called “ICO exit scams” whereby the founders have no intention of ever running the project after raising money through an ‘Initial Coin Offering’ thrive in the current environment of sky-high profits, overwhelming hype, and the time-constrained nature of ICOs, which make investors feel like they need to invest quickly or risk losing out on a ‘too good to be true’ deal. Whether you are just starting out or are a seasoned financial investor, every single investment decision needs to be analyzed thoroughly – there is no substitute for due diligence. If you are considering investing in an ICO, we highly recommend taking the following steps:

  1. Read the ICO white paper thoroughly. This is number one on this list for a reason, their entire business plan is written out and provided as a downloadable PDF. Have you downloaded it? Have you read it? Does the concept make sense to you?
  2. What problem is the product solving? Does the offering adhere to basic business principles?
  3. Get to know the leadership team and their experience. Ask the team the difficult questions. Review their previous work history closely. How much experience do they have? Any skeletons in their closet? Are these profiles even real? LinkedIn is helpful here, check the leadership’s CV thoroughly. Go the extra mile, check in with colleagues from their former companies.
  4. Check forums to gain insight into what the cryptocurrency community is saying about the project. Head over to Reddit and Telegram and engage with the investment community – and don’t go to the projects official channels, ask these questions in neutral channels to get an unbiased opinion.
  5. Make sure that the ICO is planning on using a trusted escrow company to handle funds for their ICO. Escrow gives you an additional layer of protection, ensuring that you will at least receive the promised tokens from the ICO before parting with your hard-earned capital.
  6. Take a look at what rating companies, such as ICORating.com are saying about the ICO. If the new project isn’t rated, there’s a high chance that it’s a scam. Also be sure to check and compare risk scores.

At Crypto Project Times, believe that cryptocurrency is the future of money and that these growing pains are temporary – regulation and investor protections are coming. Until then, it is wise to be cautious and prudent before including ICO’s in your investment portfolio.


About Cryoto Project Times: The leader in Crypto Project News & opinion, CPN is a media outlet that strives for the highest journalistic standards and abides by a strict code of journalistic ethics. CPN is an independent operating subsidiary of EngineBloc LLC, which provides marketing and communications support for blockchain start-ups. For sponsored content inquiries, contact CryptoPressEngine the exclusive PR partner of CPN.