How to Spot a Scam ICO

There are a lot of Initial Coin Offerings (ICOs) happening these days, and not all of them are legitimate. In fact, many of them are scams. If you’re thinking about investing in an ICO, it’s important to be able to spot a scam so that you don’t lose your hard-earned money.

In this post, we will discuss how to spot a scam ICO and protect yourself from being scammed.

What is an ICO?

ICO stands for Initial Coin Offering. An ICO can be used to raise money for a new coin, software, or service. An ICO is basically the cryptocurrency version of an IPO. However, an ICO is essentially unregulated, making it a much riskier investment.

While some initial coin offerings (ICOs) have provided investors with substantial profits, others have proven to be scams. Scams involving initial coin offerings (ICOs) are, in reality, the crypto-asset industry’s “black sheep,” and they come in all shapes and sizes.

How to spot a fraudelent ICO

Here are some steps you can take to spot dodgy ICOs:

Learn about the team

As with any new technology, the caliber of those behind it is critical to its success. Cryptocurrency is dominated by big personalities, such as Ethereum founder Vitalik Buterin. Such a person can either make or break a new project just by having their names attached to it.

It is for this reason that scammers are increasingly creating phony founders and biographies for their projects.

To avoid falling victim to this scam, do your homework on the project’s team members before making any investments. Not being able to obtain any information on a developer or creator via social media platforms is a red flag.

It’s worth checking to make sure the team members’ profiles are active. Those that have thousands of followers but don’t interact with their fans at all may not be real.

Monitor the token sale

A token or currency system is essential to the financing process of any ICO. It’s important for legitimate businesses and projects to make it easy for prospective buyers to see the system and the progress of the token sale.

Keep a keen eye on token sales as the ICO progresses. If a company makes it very difficult to monitor the progress of their ICO, this is a huge red flag.

Also be aware that it’s possible for fraudulent ICOs to disguise token sale progress through an individual contribution address, obscuring how much money has been raised and the amount of time left in the sale. Even if there is no indication of a successful sale at the same time, this may be an attempt to raise urgency among possible investors.

Peruse the whitepaper

Any credible project will prepare a detailed whitepaper prior to their initial coin offering. It’s one of the few ways an investor may get a sense of the company’s long-term goals and strategy.

Investors should not have much faith in a firm if the majority of its whitepaper content is focused on the company’s assertions about future financial rewards. Likewise, a whitepaper that is unusually light addressing the technical side of their business model may be another indicator of potential fraud.

Additionally, be on the lookout for white papers that have been plagiarized. This would obviously indicate a fraudulent project.

On the other hand, detailed information on the technology, team, product, and potential applications, as well as a plan for the project’s further development and a business model, should engender greater confidence.

Determine if the ICO is adhering to regulations

Regulation of the ICO market is still ongoing, but certain best practices are already in place for new projects to adhere to as regulators around the world tighten their focus and develop laws and guidelines.

These measures demonstrate to investors that a company is serious about adhering to regulatory requirements. Two examples of such regulations are the Know Your Customer (KYC) and Anti-Money-Laundering (AML) protocols.

Additionally, investors should expect to see a copy of the company’s certificate of incorporation and a list of the firm’s board members. Both documents should be readily available online.

Gauge the project’s feasibility

Successful ICOs and digital currencies are those with the core framework to outlive their rivals. After initial interest fades, many launches, even highly publicized ones, have faltered. The ability of a corporation to meet its stated objectives is often a determining factor in the success of an investment.

Viability and openness go hand in hand in this context. A company that has superior concepts and models will generally want to be as open as possible to the public. Therefore, look for companies that post regular, comprehensive status reports on their website or social media.

Another helpful thing to look for is whether or not a corporation keeps track of what happened during the development process as well.

Check for a well-defined roadmap

An ICO project’s future financial goals are laid out in a clear schedule that is usually disclosed in the whitepaper or on the website of the project. Look for an organization that can put its innovative idea into action both in the near term and throughout the long run.

If a project lacks a well-defined roadmap, it’s an indicator that the project isn’t thinking about the long term and is instead focused on making money now. These kinds of initiatives should be examined in further detail or avoided at all costs.

Conduct your own due diligence

It’s helpful to participate in discussions on Telegram or Discord to see what others are saying about an upcoming ICO. However, don’t rely solely on the opinions of strangers on the internet. It’s important to do your own research so you can be certain the ICO you plan to invest in is legitimate.


Without regulation, developers can use any number of tricks to deceive investors, so it is imperative that investors exercise caution and do some research before participating in any initial coin offering.

By carefully considering a company’s team and project plan, you can protect yourself and your hard-earned money from ICO scams.

Chat with the expert NFT promoters and marketers at Mooning

Sure, all the examples of NFT promotions we listed are from global brands with endless coin to throw at their campaigns. But you really don’t need a crazy-high budget to see some seriously incredible outcomes – as long as you know the delicate intricacies of building a killer NFT marketing strategy!

If not, no worries – Mooning is here to take care of everything for you and make sure you see the most amazing ROI you’ve ever seen before. Our team has the knowledge and experience to promote your NFTs in order to deliver maximum awareness and interest, driving the sales prices up sky-high and beyond.

We provide a full suite of expert NFT marketing services and go above and beyond for every one of our clients to ensure only the best results. Our team will help with everything from minting, listing and selling, NFT creator sourcing, community management and campaign conceptualisation.

So get in touch with us now on 1300 818 435 or message us online.