How to Avoid Scam ICOs

There are some signs, which may tell you this ICO is a scam. Here are 6 signs to be looking for:


1. No white paper or plagiarized white paper


A white paper contains information on the team’s plans, technical aspects of the project, the token distribution model. If an ICO does not provide a white paper, it means it is a scam.
However, a white paper providing no relevant information on the upcoming ICO or a plagiarized white paper could also signal that you may lose all your investment. 
So if you are thinking about investing in an ICO, google several passages from its white paper to make sure it has not been copied from other projects.


2. Poor online presence


The more you know about the ICO’s team, the better. Ideally, a strong ICO should provide potential investors with detailed information on the founders, developers, advisors and other team members involved in the project.
Look for additional information on LinkedIn, check prior association with other organizations and educational institutions, these details are quite easy to fact-check.
Use Google Image Search to verify identities of ICO team members. 
Check the Facebook page of the project, ICOs that are worth something have a significant following. Try to interact with ICO team members in the Telegram chat. If the ICO team members are reluctant to communicate with potential investors, this means it is likely to be a scam.


3. Suspicious premines


Premining is not necessarily a sign of scam, but if the project reserves a disproportionate amount for premining, it should be a cause for concern. If the ICO favours the development team or founders with an imbalanced amount of tokens, this could mean the project is aimed at maximizing the personal gain of the team members.  


4. Unrealistic goals 


The ICO team should provide investors with detailed information about their achievements as of today and their plans for the future in the form of a road map. If there is no road map, this could mean the team’s plans for the future are to exit and profit.
In addition, the team’s goals should be realistic. Scam projects often make bold statements, promising to end poverty or combat global warming. No price predictions for tokens, no promises to save the world - otherwise, it is likely to be a scam.  


5. Empty code repositories


By providing a link to their code repository the ICO team allows investors to check if the underlying technology that drives a blockchain solution is viable. If you have not been provided any link or your ICO links through to an empty repository, this is definitely not the project to invest in.
If you are not a person with an IT background, you can still check if the repository is active and regularly updated. 


6. Compromised escrow


ICOs generally have an escrow to keep users’ funds during the coin offering and after. These escrows are usually multisig wallets, while holders of multisig keys are two or more trusted members of the community and a project team member. In this case, the team member has to ask community members for permission to move the funds.
So pay attention to escrow participants and conditions.  

Do not be lazy to do research or analyze facts, and you will not lose your money.