16 September, 2020 

How To Detect A Crypto-Scam Project

Not all cryptocurrency projects are equally useful. Unfortunately, there are many exorbitant fraudulent schemes among them. Such cases cast a shadow on the reputation of cryptocurrency as such and do not contribute to its promotion to the masses. How to protect yourself from interaction with unscrupulous teams and founders? Let's find out
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How To Detect A Crypto-Scam Project

No matter how rich and risky a philanthropist you are, investing in cryptocurrencies needs to be considered. The more you learn about the project, the more carefully and even meticulously you study it — the more your chances of not running into a scam.

The following are critical points that should alert any thinking person.

Cheap Looking Website

A website is the face of any project. Startups are often limited in finances, and a good site will cost a pretty penny. Many companies use free templates first. For work within the company, this may be a temporary option, but when a project is launched into a large information world, the site becomes its visiting card. Therefore, sites made "on the knee" look very suspicious. Such sites give the impression that no one was in a hurry to invest and try on their design.

Fake Characters Instead Of Real Employees

Do not be too lazy to look in the social networks for the pages of the people involved in the project. Carefully analyze the information received. Would you trust these people with your money? If on their pages there is not a word of mention about this project, and the information differs from the one indicated by the organization, you have every reason to believe that the matter is not clean.

Suspicious Looking White Paper

White Paper contains detailed information about the project. This document should give a clear understanding of the objectives, conditions, and objective reasons to invest in a specific cryptocurrency. If besides self-promotion and “water-like” content there is no information useful for the investor, you should be warned. White Paper for ICO or Social Listing should also clearly state where the funds raised will be spent.

We recommend reading: How To Choose A Legit Cryptocurrency Exchanger

Company Registration Issues

You should be concerned if there is no data on the registration of the company anywhere. Also, check whether the legislation of the country of the project is loyal to startups of this kind and whether the information provided by the company matches the actual data. Registers with which this can be done are usually publicly available.

Do not be afraid to ask questions if something seems suspicious to you. The speed and wording of the answer to them can also say a lot about the people behind the project. Always do your own research before investing in blockchain projects. There are organizations engaged in such research professionally. But for anyone interested in fintech, it’s important to be able to analyze the data yourself.

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