Cryptocurrencies have been a blessing to many people due to the potential to making super normal profits with little investment. Conversely, however, just like HYIP , Ponzi and Pyramid schemes (many people have been scammed in these programs , so avoid them) cryptocurrencies are fraught with scammers in need of fast money. Most worryingly, these scammers know what people want in ICO ( top team , project, etc) and thus create fake profiles with real people´s ID´s and linkedin profile links.
Moreover, according to CNBCnews ,
There is big money in ICOs, and they are largely unregulated. Last year, companies raised $3.8 billion via ICOs, and this year alone they have already raised $2.8 billion, according to data from CoinSchedule, a site which tracks the activity in the space.
But ICOs are unregulated in most countries, meaning investors don't have the protections that they enjoy with other assets such as stocks. However regulators are keeping a closer eye on ICO activity, amid a rising number of reports of scams
I am sure that you guys still remember the issue with Bitconnect , including other too good to be true projects and HYIP´s. Most recently, GIZA scammed investor a total of 2MUSD via ICO and now their website is offline however you can see archived one here -take note how perfect all info´s are including team profiles.
According to CNBC
"Everything was fine, until that company that was meant to develop their device came out on the internet and said that Giza has cut ties, and it seems to be a scam and they might not be developing anything. Then things started looking fishy. Read full story here
Some takeaways:
Due diligence: There is no perfect solution to avoiding fake projects because scammers are very smart. The main thing to note is that you should invest on projects you at least can contact / know some of the main project leaders and in some cases have a word or chat with them. Moreover, as I indicated in my last posts-invest only your spare cash -especially amount you can lose and avoid all too good to be true schemes because no one will give you free money.
Established coins: Some people avoid ICO´s due to scam projects and only invest in top coins with real life value. A good example is steem (steem power) which gives investors opportunities to making daily profits. On the other hand, a smart diversification and targeting undervalued new tokesn/coins: catch them when they are young (after a due diligence) will be helpful.
Do you agree? Send in your comments and or suggestions, upvote in order to send in your support and resteem in order for others to learn.
Click here and read my former post:Will Steem and other altcoins ever move out of Bitcoin Shadow?
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