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Blockchain Editorial

4 Ways to Avoid ICO Scams

With cryptocurrency ICOs taking center stage lately, there will be more attempts to scam people as well. Below are some basic tips to avoid getting scammed by a cryptocurrency ICO:

1. Always Read the Whitepaper

Randomly investing in cryptocurrency ICOs can pay off in the long run, but it also greatly increases your chances of investing in a bogus project. Any ICO that does not have a detailed whitepaper should be avoided – this is a basic requirement for any serious project.

2. Verify the Legitimacy of the Team

Any project that does not want to make the names of its team members public should also raise red flags. If the names and identities are made public, do some research on the people involved in the project. Most importantly, there should be talented developers publicly involved with the project.

3. Only Trust Information Provided by the Team

On multiple occasions, we see people spreading fake Ethereum wallet addresses to participate in a specific cryptocurrency ICO. Only use the information provided by the team itself and the address shown on the legitimate ICO website.

4. Keep Tabs on Projects You’re Interested in

Perhaps the biggest threat to cryptocurrency ICOs and potential investors comes in the form of phishing sites . More often than not, we see clone websites for upcoming ICOs appear on the internet. Since phishing sites look exactly like the real ICO site, investors seemingly need to know the official site before it launches. That is very hard to achieve, as most ICO projects want to keep pre-ICO and ICO links undisclosed until the campaign starts. Keeping tabs on projects through platforms such as Tokenmarket will guarantee users will always find the correct URL for a cryptocurrency ICO.

Even though TokenMarket does a good job to keep track of cryptocurrency ICOs, we will need a decentralized registry for these types of projects. A decentralized registry can provide whitelist services to cull the phishing sites from the real platforms. Ironically, virtually all cryptocurrency ICOs rely on centralized technology, which is problematic for such efforts.

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