How to spot and avoid fake cryptocurrency companies and websites

crypto-scam-prevention

As the industry continues to expand, dozens of cryptocurrencies and continue to launch.

All of these new coins and come from a series of Initial Offerings (ICOs). Since this is an unregulated industry where anyone can launch their coin or token, the appetite for these opportunities has grown from a wide pool of investors.

In this unregulated industry, and technology are evolving so quickly that it is difficult for even seasoned investors to keep up with the terminology.

Therefore, there is no guarantee that any or -related will be legitimate or successful. But I’ll outline a few steps below to help you be as sure as possible that you’re not falling for a website.

Know the team

Although there is unity in the industry, you need to know the team behind the initiative.

The website must have a page that shows the developers and the administrative team behind the project. This is the most important factor for any or cryptocurrency.

Prominent names dominate the space. For example, superstar developers like founder Vitalik can decide whether or not a new project comes to fruition simply by having their name listed on a development team.

Scammers can therefore easily invent founders and biographies for their projects. It is therefore important that you thoroughly research the individual team members of a project before investing.

If you can’t find information about a particular or founder on LinkedIn or other social media, steer clear. Once you have the profiles, check if their activity matches the number of followers and likes they gather.

You also need to check if their qualifications match. Their qualifications must match the experience they claim to have that is most relevant to the current project.

Any website without the above factors is a website.

Be thorough with the

You need to read a company’s or ICO thoroughly before thinking of investing. This is because it is the foundational document for that project that is expected to lay out the background, goals, strategy, concerns, and implementation timeline for any -related project.

The white papers tell you everything you need to know about the project

Note that websites usually have an eye-catching design but lack a fundamentally sound concept. They are usually perfect, and you can hardly spot any mistakes.

A reputable company, on the other hand, may have a website with spelling errors, but the consists of a rock-solid concept and a carefully thought-out implementation plan.

So check to see if the has complementary resources, including financial models, legal aspects, an analysis of SWOT, and a roadmap for implementation.

Avoid companies without a at all costs

Another challenge is that a fraudulent can come with a compelling whitepaper. For example, PlexCoin managed to raise more than $15 million before the U.S. Securities and Commission (SEC) stepped in to shut it down.

All you need to make sure is that the states the following:

  • How the plans to succeed.
  • What actions it will take to achieve its goals.
  • Review and monitor the Token Sale.

To facilitate the crowdfunding process. an will depend on a token or currency system. A reputable will ensure that the system and the progress of the token sale are easily visible to potential investors. Such a company doesn’t have a skeleton in its closet.

But a that doesn’t give a potential investor such access is a red flag. Make sure to check and watch the token sale numbers as the continues over time to see how it performs.

Most fraudulent ICOs usually hide their token sale progress under the guise of individual contribution addresses, preventing potential investors from seeing exactly how much has been raised and how much time remains in the sale.

This is mainly done to create a sense of urgency among potential investors, even if there is no sign of a successful sale happening at the same time.

Feasibility of the project

Legitimate companies develop ICOs and cryptocurrencies that have the basic structure to outlast their competitors.

In the industry, many high- companies have launched and faltered after initial interest waned.

To identify a reputable company, it must have an achievable, feasible set of goals. This is your best chance to in such a company.

Even if the has a compelling concept, it must put that concept into action in the short and long term.

A reputable is usually transparent and they keep you informed with regular, detailed progress reports on their website or social media. They’ll even do this by sending you regular emails and newsletters that give you the timeline for the development process.

Be cautious

Make sure that you don’t follow the bandwagon of those who get into the cryptocurrency to get rich quick.

So, you need to be careful when looking for new opportunities in the and sectors.

Fraudulent companies, usually through their websites, propose that sound too good to be true.

The solution here is that you need to question every detail. Be aware that the absence of important information is an attempt to hide an unsound model or concept.

You can also look for outside sources to verify the legitimacy of a project before you invest. This will help you avoid falling into the hands of scammers.

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Nothing on Cryptinus constitutes professional and/or financial advice. Always think for yourself and make sound decisions when investing. Never money that you can’t afford to lose.