3 Ways to Identify an ICO Scam

By Josiah Wilmoth

Initial coin offerings (ICOs) and token generation events (TGEs) offer token buyers a wide range of opportunities to engage in the crypto marketplace, but the growing popularity of ICOs and the often-technical nature of the blockchain ecosystem has led some token buyers to unwittingly contribute to ICO scams.

Below, this article explains three ways token buyers can identify an ICO scam so they can avoid them in the future and ensure they direct their funds toward truly-promising projects:

3 Ways to Identify an ICO Scam

1. The Developers Are Anonymous

The first and most blatant sign of an ICO scam is that the token’s developers are anonymous or otherwise-unknown. While it’s true that the creator of Bitcoin — a pseudonymous individual or group operating under the name Satoshi Nakamoto — did not reveal his true identity, he was able to this because he created a network that did not depend on the trustworthiness of a central authority. This is not the case with ICOs and TGEs. By holding an ICO, a startup is asking token buyers to trust that the developers will deliver a working product instead of running off with their money, so the team should be willing to back up its promises and claims with verifiable identities.

If a team is unwilling to identify itself, token buyers should be very cautious about contributing to the project. While there may be valid reasons to desire this privacy, it is far more likely that their purposes are nefarious. PlexCoin, for instance, declined to reveal the identities of its team members, obfuscating the fact that one of its organizers had run afoul of securities regulations in Quebec on several occasions, both before and during the PlexCoin ICO.

Read More Here: http://strategiccoin.com/3-ways-to-identify-an-ico-scam/