With the recent growth in ICOs and cryptocurrency, there are concerns that they offer a fertile ground for fraudsters to get involved in.
If you’re looking to invest and feeling apprehensive in doing so, there are many ways you can protect your money by learning to identify key red flags. After all, unfortunately not all ICOs are legitimate but here are a few tips to spotting a fake ICO.
Is the URL and connection secure?
One of the first things to check when you are vetting a new blockchain startup is whether your connection is secure. If you have a secure connection, the URL will lead to ‘HTTPS’ and not ‘HTTP’ or another alternative.
Many scammers will also use online adverts to access users who are typing “ICOs” or “Buy Bitcoins” into their search engines. To prevent this, try not to click on any adverts and make sure you are using an original/organic link.
Avoid Pyramid or Ponzi Schemes
A common aspect that scammers use is a Pyramid or Ponzi scheme. These are often unrealistic offers, with overly consistent promises about returns the user can gain.
These scams make sure the user's adventure doesn't make a product or produce any money. Avoid marketing arrangements which are ‘tiered’ or ‘multi-level’. Any website or ad claiming you can have both a high return at a low risk may seem almost too good to be true. That’s because they are.
Impersonation of legitimate brands
Phishing scams are very common, this is where hackers reach out the members of the bitcoin community using social media or email with offers designed to get personal information or access to bitcoin wallets.
Whilst there are some risks with investing in ICOs, there are also many benefits. As with any kind of investment, it’s essential to seek advice from a professional that will be able to guide and advise you on each stage to ensure you are not at risk during your investment.
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