The cryptocurrency market is growing, as is the number of fake cryptocurrencies and scams.
Thousands of new cryptocurrencies are launched every month. With these new cryptocurrencies and tokens comes a series of initial coin offerings (ICOs). Since the inception of cryptocurrencies, their popularity has grown exponentially and continues to grow. Despite the fact that these digital currencies are highly volatile in nature, investors have shown that they are willing to pay money for the highly speculative cryptocurrency, but they could be investing in fraudulent tokens and ICOs without their knowledge!
There are thousands of cryptocurrencies that investors can choose from and some of them are not even legit. Therefore, it is imperative that investors efficiently identify fake cryptocurrencies and ICO scams.
Digging deep into the creators: One of the best methods to understand fraudulent tactics is to thoroughly research the individual creators of a project before investing. Investors need to understand that if the team is legitimate they will have information about themselves on social media, it’s a bad sign if they don’t find any information.
Avoid companies that do not provide a technical document of the project concept.: The ICO whitepaper is the fundamental document for the project, which must contain the objectives, strategies, background, concerns and timetable for the implementation of the project. It is best to stay away from companies that have not provided a white paper.
Stay away from mean tweets and social media updates: Malicious phishing bots are widespread on social media when it comes to cryptocurrencies. Investors should never trust random Twitter or Facebook influencers promoting a new crypto scheme.
Look up token sales figures: Legitimate companies and efforts allow investors to see the system and the progress of the token sale. If the company makes it difficult for anyone to chart the progress of their ICO, then that is a huge red flag.
Analyze the authenticity of company websites.Note: There are a surprising number of websites that have been set up to look like authentic websites, especially when it comes to digital currencies. It is very important that investors stay away from these websites. They can research more about such websites and understand the difference between a real website and a fake one.
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