How to Distinguish Scam and Successful ICO

The crypto-currency boom is accomplished by the stealthy attention of fraudsters like any other new high-yielding sphere, investments in blockchain based projects are accompanied by considerable risk. Fake ICO’s are called a scam — their organizers play on imprudence and often superficial awareness of users to attract “easy money” and hide in an unknown direction. In this article we’ll describe what are the features of intentional fraudulent ICO and what are the features of successful one.

ICO: what you need to pay attention to

Lawyers specializing in crypto-currencies transactions and active bitcoin community participants are suggest to study the following points:

• First of all check all the social media accounts: LinkedIn, Bitcointalk and Facebook. “Dead” accounts and lack of activity are the alarm bells.
• The technology must meet the current realities, not the distant future. Roughly speaking, investments in Wi-Fi deployment on Mars are not adequate at all. The path from the idea to the incarnation can be extremely long. Scammers do not bother to detail White Paper and Roadmap, avoid direct answers or use blurry / confusing language.
• Legal “trace” — pay attention on where the company is registered. Such resources like who.is and websites of state registrars can help you with that. Companies without history with a recently purchased domain is suspicious. It’s a clear signal of scam.

If the project has no economic justification it’s better to bypass it. Scammers often use the thesis “Buy it now almost for nothing — then sell at exorbitant prices!”. The higher the risk, the more profits the scam ICO’s are promise.

Typically, the proposals of one-day companies include cloud mining, fake alt-coins, the potential of which is “guaranteed” to be revealed “over time,” and super-profitable investment programs under the control of “experienced traders”.

For the 2-nd quarter of 2017 startups attracted $ 797 million through ICO, that is three times more than through venture investors ($ 235 million), and 22 times more than was attracted through ICO in 1-st quarter of 2017.

Examples of scam-ICO

It is obvious that investing in any media product or infrastructure solution is less dangerous than in a casino or the mentioned cloud mining. It is also clear that not all fraudulent projects on the blockhouse initially sought to put dust in the eyes of the audience and lie on the bottom with a torn jackpot — someone burns out when developing a start-up, someone quarrels with co-founders, etc.

The full list of scam-ICO you will find on badbitcoin.org. We just you several examples:

• Confido. The project offered P2P transactions with tracking of delivery and the use of smart contracts, the market capitalization of domestic crypto currency reached $ 10 million. $ 374 thousand through ICO was collected, but the official site ceased to work, and with it the accounts in FB, TW, Medium and Reddit .
• E-Coin. Through the managing company QUID PRO QUO startup attracted $ 4.2 million from hundreds of investors. E-Coin fell into the spotlight of FINMA (a Swiss financial regulator) because of activities similar to the opening of deposits by banks. At the same time, QUID PRO QUO did not have a corresponding license, and the crypto currency was stored on its servers, and not in the distributed blockchain-based network. Under FINMA pressure E-coin was closed .
• Tithecoin. The project is noteworthy for the meaningless description of ICO and the website on — attention! — on free hosting.
• Matchpool, social network on the blockchain. During the ICO, the team received $ 5.8 million, but a few days later the startup was abandoned by a technical director suspected of withdrawing investors’ funds.
• Razormind, the operating system on the blockchain Creators spent a lot on advertising, so that the audience paid attention to their fraudulent project.
• An unpleasant story is connected with ICO of the Bancor exchange — the attackers launched a copy of the original site (with a difference in the domain zone) and enriched by $ 0.7 million.

Bancor, by the way, eventually attracted $ 153 million. Other recent indicative results: TenX (bank cards for crypto currency) — $ 83 million, Status (mobile application for ETH transactions) — $ 95 million, EOS (smart platform) — $ 170 million

According to Chainalysis, almost 10% of funds from recent ICO fell into the hands of scammers.

ICO VRT World

And now — to the main thing, to the VRT World project (headquartered in Moscow, in addition to the representative office in Singapore) and its platform on the blockchain, which will eventually unite the marketplace, development environment, streaming service and a cybersport site for VR. The company offers a viable product and business model for a fast-growing market — for example, in 2016 venture and corporate investments in the VR and AR area amounted to $ 2.3 billion (according to Digi-Capital), the number of companies engaged in the industry only in the Russian Federation jumped from 60 to 183 (AVRA), and for the audience there are such giants as Facebook, Valve, HTC, Google, Samsung and Sony. Sony, by the way, in just one year managed to sell 2 million sets of PlayStation VR and 12.2 million games for them. With the demand in the IT industry everything is clear, but what about the other features of the ICO, which has nothing to do with the scum? Let’s name some of that features.

Product (prototype). VRT World intends to launch a global network of gaming VR-parks. At the moment, it is invested more than $ 0.55 million. The first such park has been operating in Moscow since December 2017 — it was already visited, say, by midfielder of FC Lokomotiv Anton Miranchuk and winner of the show “Dances. Battle of the Seasons” Anton Panufnik. The franchise has sold licenses for the opening of 30 parks in Europe. It is the network of parks that will become the main customer of VR-content within the ecosystem created by VRT World.

Another 20 million rubles. VRT World spent on the development of Full Body Tracking technology, allowing several participants to interact in virtual reality. It is extremely important for its own game VRT World, “Starship Troopers”, — a team shooter in a sci-fi setting.

Team. For more information about the people behind VRT World, you can read in the article on Medium. This is professional team with solid projects behind them — CEO Konstantin Negachev and IT Director Dmitry Livshin, for example, run ILN Softlab in parallel, and Niima Teymori, a consultant for smart-contract & solidity, involved in MechWarrior Online and Duke Nukem Forever. Earlier VRT World presented the interactive educational project “VR Time Machine”, now the team is working on VR-shooter “Starship Troopers”.

Advisors. The project is supported by:

· Marco Sacco, President of the European Association VR and AR.

· Francois Asseman, head of the European office of OptiTrack (VRT World orders the sensors, lenses and cameras in VR for this company).

· Sergei Pisotsky, former sports director of the cyber-sport organization Virtus.pro.

· Daria Arefieva, CryptoFriends, former e head of marketing for iBank.

· Igor Vasiliadis, CEO of Level 2 Consulting. * Full list of advisers available here.

Why will the VRT token grow in price? Here everything is simple: you can pay for domestic currency in VR parks (partially) and repay the franchise fee, after which these tokens will be burned. VR-marketplace will eventually become the equivalent of Steam, that is, the leader of the industry without an alternative, respectively, the cost of VRT coins will rise significantly. To make the industry without reservations in mass, VRT World will launch a streaming service and an e-sports platform in VR.

The success of pre-ICO. During pre-ICO the project has already collected more than $ 0.72 million, which allows to say that the ICO will certainly achieve its goals. ICO will be held on February 27 — March 27, hardcap — $ 16 million. 25% of investments will be spent on construction of 15 parks in the USA, Canada, Israel, UAE, PRC and Japan, 25% — for their PR and marketing, 12% — for creation and promotion of the marketplace on the block, 12% for the development of the SDK, 12% for creating content for the parks, 5% for the fund to support the developers (grants, scholarships, hakatons).

As you can see, VRT World has strong team, real technology, and proven business model. This is a truly ambitious and realistic project with a reliable product, capable of giving a powerful impetus to the VR industry.