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Modern technology has opened the doors to a more competitive digital trade. These days, financial technology, cryptocurrency, and Initial Coin Offerings or ICOs are capturing the interest of investors, enthusiasts, and traders. However, regardless of the amount of security and scrutiny that is put into these digital currencies, there is still the chance of fraudulent activity in the fintech and crypto sphere, since almost everything is done online.
Investors like to support ICOs for several reasons: because they can lead to long-term returns, because the investor wants to support the crypto economy, or because the project itself seems exciting. However, not all ICOs on the market are worth supporting or legitimate, and oftentimes fraudulent ICO projects gain unworthy attention and help themselves to investorsâ money. Although people have been learning to practice due diligence by consulting an upcoming ICO list for ratings and reviews, this is not always enough to protect them from scams.
How to Spot Fraudulent ICOs
Visiting an ICO listing allows interested parties to seek out potential investments beforehand. Someone who wants to invest in an ICO can take a look at the proposed projects and learn about these companies before putting any money into them. Â If a person is looking to invest some extra money and has decided that ICOs are the way to go, they should do some research and find a project that seems viable.
Due diligence on the side of an investor means that the person should take the time to look at the interesting ICOs on the upcoming ICO list
and examine each elements of the business and project to determine whether it might be a scam ICO. Â There are a lot of ways that one can spot red flags, and while it may be easier for an experienced crypto investor, even newcomers to the field can learn the warning signs.
The most common indicator of a fraudulent ICO is a website thatâs not up to the current industry standards. Most scam ICOs donât take too much time in developing a proper website and just use templates, which can be found at the licensing at the bottom of the page.
You should determine the whitepaperâs originality, since a plagiarised whitepaper is a sure sign of scam. Aside from that, check the spelling and grammar of the content since legitimate ICOs should always invest in professional writers to compose their papers and documents.
An ICO should always employ a team of experts and advisers, because these people are the faces of the company. Some investors donât invest based on the company itself but instead based on the proven blockchain developers and experts involved with the project. If an ICO doesnât have proper LinkedIn profiles for its members, or if theyâre trying to use images of other people, then itâs a big red flag.
Ratings as Marketing and Promotion
An Initial Coin Offering or ICO is often given a rating according to how strong of an investment it is projected to become. Most rating sites have criteria for why a company or project is given a certain rating or risk indicator. In a perfect world these numbers are absolute and unblemished by ratings purchase, but thatâs not always the case since some companies use their ratings as a way to help market certain clients.
While there are a lot of reputable cryptocurrency and investment experts out there, there are also some that can be bought off or hired by scam ICOs to vouch for their credibility. Sometimes, itâs a question of morality and integrity; however, some company cultures feel that they are merely doing marketing promotions or advertising deals regardless of who those deals were made with.
Some cryptocurrency PR agencies are too busy to check out who their clients are, and in effect, they just treat ratings as another way to showcase their client. However, what they havenât stopped to think about is that giving ratings is a responsibility and not just a marketing tool. If you give a high rating to a fraudulent ICO or STO, you will effectively assist scammers in committing fraud.
How Upcoming ICO Listing Help in Filtering Scams
Most cryptocurrency investors rely on the opinions of other experts in the financial technology industry, which is why itâs very important that the ones in charge should be responsible with their research. There should be due diligence especially on the part of the authorities creating an upcoming ICO list rating because there is money at stake, as well asÂ the integrity of Fintech and cryptocurrency as industries.
Government compliance and regulation policies are still under discussion, but this doesnât mean that fraudulent activities should be tolerated. Everyone has a responsibility in protecting the people who are bringing money into the cryptocurrency trade. Since financial technology is a young industry, it needs all the help and financing it can get from investors, enthusiasts, and traders; if Fintech and the crypto sphere become overrun by scam ICOs or STOs, then the industry Â may lose the opportunity for growth and longevity.