How to Invest Safely in an ICO?

By SiliconIndia   |   Thursday, 05 April 2018, 10:11 Hrs
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Initial Coin OfferingInitial Coin Offerings (ICOs) are all the rage at the moment. There are a large number of ICOs coming up on a weekly basis, attracting millions of people from around the globe to invest into them. However, many ICOs end up being just a scam - a way to make people part with their money. In today’s day and age, it is essential to invest with caution.

While it is not wrong to invest into an ICO and the risk of scams shouldn’t scare the investors away, but investors also need to be smart and need to understand the risks associated with investing in ICOs. Investors in today’s day and age need to be smart as well as sharp to identify which ICOs are safe to invest in. With that in mind, let us take a look at some red flags which should immediately warn you about the ICO being a shady investment -

How to Identify ICO Scams

- Read Carefully! The ICO's website and whitepaper tells a lot about them. If the documents on the company’s website lack consistency, or use ambiguous terms, there's a chance you are dealing with a shady ICO.

- People Involved: Most ICO website showcase the team of advisors and founders. It is essential to look up about these people. Are they really who they claim to be? Check their social media profiles, LinkedIn, professional papers written by them, their participation in community discussions, etc. Sometimes, some websites tend to use stock images as pictures of these people - which is a clear red flag!

- The Website Design: Scammers do not usually spend a lot of time designing the websites. If a website appears to have just the bare minimums and appears to be a dump of content rather than being a visually appealing website, there’s a chance it is a fraud ICO. While some fraudsters may dedicate time and effort in making a professional looking website, a basic website is usually a major red flag.

- Are their Goals Attainable: Sometimes, some scam ICO offerings tend to portray a picture which appears to good to be true. And remember the golden rule of the internet: if it is too good to be true, it is, in all likelihood, not true. Scammers sometimes tend to set up goals which appear almost unattainable. Claims such as building a new transportation system, or offering cheaper benefits are usually false claims to attract investors. Moreover, also question yourself: is the kind of roadmap they have set for the future attainable? These are all signs of a fraud ICO that need to be considered.

ICOs are coming out at an increasing pace of late. With 900 ICOs recorded in the past one year, statistically, 2.5 ICOs come out every day. It is critical to understand that not all of these are legit ICOs. Publications such as are among some of the best sources to know about upcoming ICOs. Their team does all the research to ensure that only genuine ICOs are listed on the platform, thereby helping the investors ensure that their money is being put into the right ICOs. They also provide detailed and informative reviews, letting the investors know exactly what they are going to invest into.

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