It’s no secret that the cryptocurrency world is full of scammers, pump-and-dumpers, and other shady characters looking to take advantage of inexperienced investors. A project can seem legitimate at first glance, but there are usually warning signs if you know what to look for.
In this article, we’ll go over some of the most common tricks and red flags that shady Scam crypto projects use, so you can avoid falling victim to one of these scams! Have you ever heard of the saying if it’s too good to be true, it probably is?
Well, this applies to most business opportunities, especially in crypto land! If something seems like a crypto scam, then there’s usually a good reason why you should stay away from it. Here are some of the common warning signs that a crypto project may be an outright scam and how to spot them!
- First, pay attention to the team behind the project. If there is no team, or if the team members cannot be easily identified, that’s a red flag.
- Second, look at the project’s website and social media presence. If there is no website or social media presence, that’s another red flag.
- Third, look at the project’s whitepaper. If the whitepaper is poorly written or does not make sense, that’s another red flag.
- Fourth, look at the project’s code. If the code is not available for review, or if it is poorly written, that’s yet another red flag.
- Fifth, pay attention to the project’s token economics. If there is no information about how tokens will be distributed after the ICO, that’s one more red flag.
- Finally, do your own research. Read articles about the project online and ask people who have knowledge of blockchain technology questions about the project on forums like Reddit and Steemit. In general, trust your instincts; if something seems too good to be true then it probably is!
Table of Contents
- Scam Crypto Projects Identify Them and Protect Yourself Firstly – Look At The Team
- Evaluate Community Engagement And Activity
- Use Google Reverse Image Search
- Don’t Trust Public Opinion
- Check On Past ICO Results
- Watch Out For Fake Reviews/Ratings
- Is The Token Actually Needed
- If You Are Researching On New Crypto Project Then Mainly Focus On Below Top 10 Questions.
- Are They Open About Their Progress?
- Do They Have a Working Product?
- Do They Have a Roadmap?
- Do They Have a Whitepaper?
- Is White Paper Should Be Realistic?
- Are There Trustworthy Social Media Accounts?
- Is There Active Communication With the Community?
- Is There Any Third-Party Reviews Online?
- What Kind of Coin Is It?
- The Team Should Be Transparent?
- My Personal Opinion For My Beautiful Readers
- Frequently Asked Questions – (FAQ’s)
Scam Crypto Projects Identify Them and Protect Yourself Firstly – Look At The Team
Any reputable crypto project will have a team of experienced professionals behind it. If the team members don’t have any relevant experience, that’s a huge red flag. Also, be sure to check out their LinkedIn profiles to see if they’re actually employed by the company they claim to be.
And always try to find a phone number for the team or an email address so you can contact them directly. When you do get in touch with someone on the team, ask how long they’ve been involved with the project and how much equity they own. Avoid anything that doesn’t have an active development roadmap and timeline with clear goals.
A scammer won’t invest too much time into developing something that could eventually lead to their capture. Look at the Product: Before investing in any token, take some time to review its white paper and assess its viability.
Ask yourself questions like Does this solve a real problem? Do I understand what it does? Do I trust this team? Can I verify their code? Is there a big enough market need for this solution?
Evaluate Community Engagement And Activity
One of the most important things to look at when trying to identify a scam crypto project is community engagement and activity. If there is no community, or if the community is small and inactive, that’s a big red flag.
Furthermore, you should evaluate how engaged the community is. Are people talking about the project? Are they excited about it? Or are they just complaining? All these things can give you an idea of what kind of project you’re dealing with.
Be Wary Of Public Figures Promoting Scams: Another common tactic by scammers is to enlist public figures like social media influencers or well-known cryptocurrency developers to promote their projects in exchange for money.
The problem with this approach is that the public figure has been fooled into thinking the project will be legitimate – even though they have little control over whether or not it actually is – so it may be hard for them to admit later on that their promotion was part of a scam.
So even if someone famous recommends a certain cryptocurrency, make sure to do your own research before investing any money!
Use Google Reverse Image Search
One of the easiest ways to check if a project is a scam is to do a reverse image search on Google. Just go to Google Images and click the camera icon in the search bar. Then, you can either upload an image from your computer or paste it into the URL of an image you found online.
If the image shows up in multiple places, it’s probably not a real crypto project. It might be something like one of those get-rich-quick Ponzi schemes that are too good to be true. Or, maybe it’s just a poorly made website with nothing behind it.
Don’t Trust Public Opinion
There’s a lot of FUD (fear, uncertainty, and doubt) in the crypto world. People are quick to jump on the bandwagon of any new project, without doing their research first. This can lead to a lot of public opinion being swayed by the loudest voices, even if those voices are spreading false information.
Be wary of anyone who is trying to convince you to invest in a project without being able to provide concrete evidence of its legitimacy. You should also be wary of projects that seem too good to be true. It’s important to do your own research and learn as much as possible about the project before making any investments.
Check On Past ICO Results
A great way to check if a project is legitimate is by looking at its past ICO results. If they don’t have any, that’s a huge red flag. If they do have some, take a close look at them. Are they consistent? Do they make sense? Are the team members real? You can also check online forums and see if there are any negative reviews about the project.
One of the best ways to figure out if something is too good to be true, it’s probably a scam. We’re not saying you should avoid investing in anything new and different altogether – just be smart about it.
We recommend doing your research and asking for advice from people who are more knowledgeable than you before making an investment decision. Don’t put all your eggs in one basket, especially when we’re talking about money!
Watch Out For Fake Reviews/Ratings
When researching a new crypto project, always be weary of fake reviews and ratings. These are often created by the project team themselves in order to artificially inflate the appearance of popularity. A good way to tell if a review is fake is by looking at the language used; if it seems overly positive or uses vague terms, it’s likely not legitimate.
Another red flag is if the reviewer only has one post on the site; this could mean that they were paid to write the review. If you see multiple reviews like this, it’s best to stay away from the project.
It’s also important to keep an eye out for suspicious phrases such as moon soon or big dump coming. With these, it’s often easy to see when someone is just trying to pump up their coin and attract more investors.
However, some promoters can be harder to spot. For example, when reading cryptocurrency articles on popular sites like The Huffington Post or Forbes, it’s difficult to know whether the author is writing about their own opinions or promoting somebody else’s product without being transparent about it.
One thing you can do is search online for other articles written by the same author and see what they have said in the past; if they consistently promote certain coins without providing adequate context about what those coins actually do, then it may be wise to take those recommendations with a grain of salt.
Is The Token Actually Needed
One of the first things you should ask when evaluating a new crypto project is whether or not the token is actually needed. In many cases, the answer is no. The team may be trying to raise money without actually having a use for the token. If that’s the case, it’s probably a scam.
Remember, this rule doesn’t apply if you’re investing in a decentralized application (Dapp) where tokens are used as currency. You’ll want to ask yourself What utility does this token have? and How will it work on the platform? You’ll want your investment to give back to you in some way.
For example, if you invest in Filecoin because they provide storage solutions through the cloud and offer data storage services through their network, then your investment will likely be worth something in return such as access to data storage at discounted rates.
If You Are Researching On New Crypto Project Then Mainly Focus On Below Top 10 Questions.
If you’re new to the world of cryptocurrencies, one of the first questions you may have is How do I know if this project or coin is legit? Unfortunately, that’s not always an easy question to answer — especially if you don’t know what to look out for.
In fact, it can be very difficult to determine whether or not an ICO (Initial Coin Offering) or cryptocurrency project is legitimate at all — or just a scam in disguise. Before Investing, Here Is The Best Question, Do Research On Them.
Are They Open About Their Progress?
A project that is constantly making excuses for why they haven’t hit its milestones is likely a scam. If they are being vague about their progress or are outright lying, that’s another huge red flag. A legitimate project will be happy to share its progress with investors and the community.
Do They Have a Working Product?
One of the best ways to determine if a project is legitimate is by looking at its product. If they don’t have a working product, or if it’s obvious that their product is not finished, it’s likely a scam.
Do They Have a Roadmap?
Every good project should have a roadmap outlining its plans for the future. The roadmap should include what steps they plan on taking to get there, as well as when those steps will take place. A detailed roadmap can help you assess whether or not the project has potential.
Do They Have a Whitepaper?
A well-crafted whitepaper is essential for any legitimate crypto project. It should lay out the problem the project is solving, the solution they’re proposing, and the tokenomics of the project. If a project doesn’t have a whitepaper, or if the whitepaper is poorly written, that’s a major warning sign.
Is White Paper Should Be Realistic?
A scam project will often have an unrealistic white paper that is full of grandiose claims and promises. The team should be able to back up their claims with evidence, and the roadmap should be achievable. If the project seems too good to be true, it probably is.
Are There Trustworthy Social Media Accounts?
If a project has one or two social media accounts with no followers, that could also be a red flag. A good rule of thumb is if you can’t find any third-party reviews online then you probably shouldn’t invest in the project.
Is There Active Communication With the Community?
A big part of any project, cryptocurrency or not, is communication. If a team isn’t communicating with its investors and potential customers, that’s usually not a good sign. In the world of cryptocurrency and blockchain, where things move at lightning speed, it’s even more important for teams to be communicative.
Is There Any Third-Party Reviews Online?
One final way to assess a crypto project before investing in it is by looking at third-party reviews online. Sites like ICOAlert provide detailed reviews of cryptocurrency projects so make sure to read them before investing!
What Kind of Coin Is It?
There are many different types of coins, so it’s worth understanding what type you’re investing in before handing over your hard-earned cash! Coins that fall into this category include altcoins (think Ethereum), tokens (EOS), and stablecoins (Tether).
The Team Should Be Transparent?
A scam project will often have a team that is anonymous or refuses to answer questions. The team should be transparent about their backgrounds and experience, and they should be available to answer questions from the community.
My Personal Opinion For My Beautiful Readers
If you’re thinking about investing in a cryptocurrency project, do your research first. There are a few key things you can look for that may indicate a project is a scam.
- First, check the team’s background and see if they have a history of working on scams.
- Second, look at the project’s codebase and see if it’s been audited by a reputable third party.
- Finally, check out the project’s community and see if there are any red flags. If you’re still not sure, don’t invest. Better safe than sorry!
In conclusion, there are a few key ways to identify a scam crypto project. If the project is promising guaranteed returns, if the team is anonymous, or if the project seems too good to be true, it might be a scam.
Other red flags include unrealistic roadmap goals, lack of transparency, and not having a working product. If you’re thinking about investing in a crypto project, do your research and look for these warning signs before handing over any money.
Frequently Asked Questions – (FAQ’s)
What is a scam crypto project?
A scam crypto project is a digital asset or currency that is created with the sole purpose of defrauding investors. These projects often lack a white paper, have a team of anonymous developers, and promise unrealistic returns. If you’re thinking about investing in a crypto project, be sure to do your research to avoid getting scammed.
How can I identify a scam crypto project?
There are a few key ways to identify a scam crypto project.
- First, be wary of projects that promise guaranteed returns or that claim to have inside information.
- Second, look out for projects that require you to send money upfront in order to participate.
- Third, beware of projects that have anonymous team members or no team information listed at all.
- Fourth, red flags go up when a project has a lot of grammatical errors or typos on its website or whitepaper.
- Fifth, look out for projects with low social media activity (less than 20 posts per month). Sixth, check the project’s history. If it was launched more than six months ago without any real progress, it may not be legitimate.
- Finally, if a project has been accused of being a scam by other users and those accusations seem credible to you then you should steer clear.
Does the project have a working product? If not, be wary.
A project that doesn’t have a working product is more likely to be a scam. Why? Because it’s easy to make big promises without having to deliver on them. If the project does have a working product, make sure to do your research and understand how it works before investing.
What are the red flags of a scam crypto project?
- If a project is promising guaranteed returns, it’s likely a scam. There are no guaranteed returns in the cryptocurrency world.
- If the team behind the project is anonymous, that’s a red flag. A legitimate project should have a team that is transparent and easy to contact.
- If the project has a whitepaper that is vague or doesn’t make sense, that’s another sign that it might be a scam. The more detailed the better!
- The best way to find out if a project is legitimate or not is by researching their website, reading their white paper, and following their social media accounts.
How can I protect myself from scams?
There are a few key ways you can protect yourself from scams.
- First, do your research. Before investing in any crypto project, make sure you understand the team behind it, the technology, and the market.
- Second, be wary of promises of guaranteed returns or investments that seem too good to be true.
- Third, don’t invest more than you can afford to lose.
- Fourth, only invest in projects that have a clear use case.
- Finally, pay attention to red flags like anonymous team members or a lack of transparency.
What should I do if I’ve been scammed?
If you think you’ve been scammed, the first thing you should do is reach out to the project team. They may be able to help you get your money back or resolve the issue. You can also file a report with the SEC or FINRA if you’ve lost money due to a scam.
Finally, be sure to spread the word about what happened so that others can avoid being scammed themselves.
Are there any legitimate crypto projects out there?
It can be hard to tell if a crypto project is legitimate or not. Here are some things to look for that may indicate a scam: -The project promises guaranteed returns or claims to be risk-free -The team is anonymous or uses fake identities -There is no product or the product doesn’t work -The website is full of typos and grammatical errors -There is no contact information listed
Where can I go for more information on scams?
Unfortunately, there’s no one-stop shop for information on crypto scams. However, there are a few ways you can stay informed and protect yourself.
- First, follow credible sources of information on the crypto space.
- Second, be weary of projects that promise unrealistic returns or guarantee profits.
- Third, do your own research on a project before investing any money.
- Fourth, be cautious of projects that have a lot of hype but little substance.
- Finally, if something sounds too good to be true, it probably is.