How to Spot and Avoid Cryptocurrency Scams Like a Boss | by Blake Miner |

The ICO (Initial Coin Offering) phenomenon is a billion-dollar juggernaut.

Dozens of new cryptocurrencies launch each month through ICOs. In just the first three months of 2018, $6.3 billion was raised via ICOsthat’s more than all of 2017.

A look at the billions of dollars ICOs have raised in the last two years (Source:

There’s no doubt legitimate cryptocurrency projects and ICOs present investors with significant investment opportunities.

But the ICO fervor has also brought with it scams and fraudulent behavior that have already duped thousands of investors out of billions of dollars.

We’ve seen Pincoin and iFan take off with $660 million.

OneCoin conned investors out of $350 million via an ICO Ponzi scheme.

And with the help of Floyd Mayweather and DJ Khaled, Centra Tech duped investors out of $32 million.

Floyd Mayweather found himself caught up in the Centra Tech ICO scam

In recent years, ICO investing has reached fever pitch as investors clamor to get a piece of the huge returns on offer.

Like the cryptocurrencies they offer, at their heart ICOs are about decentralization. They’re an innovative financial model that bypasses traditional — largely institutionalized — fundraising methods.

But where there’s money to be made, there are scams to be found. Which makes the ICO landscape a hotbed for scammers.

Even the SEC created a fake ICO site to prove how easily it can be done

Just like fool’s gold, fake Rolexes and cubic zirconia before them, it’s no wonder that the cryptocurrency gold rush has attracted scammers.

In fact, we had our own run in with scammers at our launch of

With any investment opportunity, due diligence and vigilance are the name of the game. And this is especially the case with ICOs.

Here’s how to avoid ICO scams and give yourself the best chance to get the best return on your cryptocurrency investments.

Here are five airtight methods to deploy when investing in an ICO.

1. Study the White Paper Inside Out

Hmm… something doesn’t look quite right about this white paper (Source:

A white paper is the selling of the vision and technology behind an ICO. And analyzing the document forensically is an important step to vetting an ICO investment opportunity.

A white paper should be built around a viable concept, sound technology and a clear plan of implementation.

Two key things to look for in a solid white paper are a well-articulated background to the problems the technology is solving and a clear outline of how the company plans to accomplish what they’re setting out to do.

Plus, be on the lookout for well-defined timelines and financial models.

Always be sure to check the white paper isn’t simply a copy of another legitimate ICO. A quick Google search will help reveal if a white paper has been plagiarized.

And if an ICO doesn’t have a white paper at all, that’s an instant red flag that it’s an investment to avoid.

Click here to read the white paper.

2. Get to Know the Team (and Make Sure they Actually Exist)

Ryan Gosling apparently taking time off from Hollywood as a graphic designer for this fake ICO

In any start-up, the team behind it is often the most important key to success. And this is especially the case when it comes to ICOs.

The amount of funding an ICO receives is usually correlated with the experience and expertise of the team behind the company.

This also means one of the first go-to moves from the ICO scam playbook is to invent founders and biographies.

So, delve into the backgrounds of the team behind the ICO to start. Check their LinkedIn profiles and their social media accounts to make sure they exist and are who they say they are.

Cross-reference the different online sources to verify they are in fact associated with the ICO.

Hint: If they’re not talking about the ICO online, it’s a good chance someone is using their identity without them knowing it.

Once you know the founding team is real, research their qualifications and credentials.

Is the experience they claim to have legitimate?

Did they really hold that other position?

Did they really get that degree?

3. Keep an Eye on Token Sale Numbers

By being transparent during a token sale in this way, legitimate ICO companies are giving potential investors sales figures that they can use to inform their decision whether to invest or not.

If an ICO refuses to make token sale data publicly available, this is often a sign there’s something to hide — and that the ICO isn’t what it says it is.

4. Ensure the Project is Realistic (Use Common Sense)

If it’s some pie in the sky technological evolution that appears well beyond the capabilities of the team behind it, it’s probably best to hold onto your money (or Bitcoin).

Your best chance of achieving a strong ROI with an ICO is through backing a company that has a clearly defined, achievable concept coupled with feasible goals that the team can reach.

It’s pretty easy for an ICO company to hire a marketing agency to put together a flashy, bright lights launch campaign that will bring in fast ICO investment. But be sure to look beyond this to the fundamental structure behind the company.

Do they have a sound foundation that’ll outlast the initial marketing whirlwind and become a legitimate, long-term company?

5. Look for Transparent, Active Communication

What are they saying?

Are they being transparent?

Responding quickly and clearly to potential investors?

Providing updates and insights into the development of their technology?

If they’re not doing any of the above, this is signal that this might not be the best investment of your money because legitimate ICOs will also be communicative, transparent and responsive.

The second is impersonating or spoofing a legitimate ICO. Here are a few ways scammers try to pull this off.

Cloning an ICO website

Scammers spoofed the Telegram ICO site to get in on the billions being raised

Known as phishing, scammers often clone the website of a legitimate ICO, creating a site that looks like the original and uses a URL that is near identical to the legitimate project, making it easy to mistake for the real thing.

Always be sure to check the site you’re on is the legitimate page of the ICO you’re looking to invest in — look for the “https” security prefix and end tld (.com, .io, etc) in particular.

Email Spoofing

These emails can come from what looks to be a company running an ICO asking you to “change your password” or from a friend or colleague asking you to follow a link that unwittingly gives scammers access to your crypto assets.

Never click a link in an ICO-related email without first carefully vetting the source.

Bounty and Bonus Phishing Messages

Scammers sent a well-timed phishing email to Bee Token followers and duped them out of $400,000

Bounties and bonuses are a big motivator when it comes to ICOs. They’re a way to earn even more from an ICO investment. This makes them a ripe target for scammers.

Scammers often send phishing emails or messages on unofficial platforms to thousands of users, announcing ICO crowdsales, bounties or bonuses to lure investors into jumping at the opportunity to invest and sending cryptocurrency to wallet addresses that belong to the scammers.

You should NEVER send any cryptocurrency to a wallet address without verifying it is officially connected with the owner of the ICO.

ICO Admin Impersonation

Scammers infiltrated the Seele Telegram group and requested Ethereum from its members

Telegram Messenger is the mainstay communications channel for ICOs. It’s where founders and investors directly connect — and where scammers often impersonate admins to dupe investors.

Posing as ICO Telegram group admins, scammers send private messages to group members offering a private sale of tokens with various incentives that suck investors into purchasing through these hoax token offers.

When you receive a message from a Telegram group admin, be sure to cross reference their handle with the actual admins of the group. And be very wary of token sale offers via private message.

But, like all investments (and probably even more so), they come with significant risks of being scammed, defrauded and misled.

So, when it comes to investing in that next hot ICO you’ve discovered, do your due diligence, starting with what we’ve outlined here today.

It’s on all of us — crypto believers, enthusiasts, creators and investors — to wise up, be smart and most importantly hold the perpetrators of scam ICOs accountable.

The reality is, the more often scams happen and people fall for them, the sooner government intervention comes. And this goes against the whole idea of decentralization that we’re fighting for.

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