Initial Coin Offering Scams – What Are They And How To Avoid Them
It is no big secret that since the beginning of the Internet and online business, there has been plenty of scams and cybercrime in the virtual world, which aims to harm users in any way. Whether it is identity theft, money, or other specific data, it is imperative to be aware that the Internet is flooded with fraudulent sites.
Initial Coin Offering is also a vulnerable “ground” for fraudsters since it is still not completely regulated. However, before we reveal to you which are the most common scam variants, let’s see what the ICO is, shall we?
An ICO represents an acronym of the Initial Coin Offering, a crypto industry equivalent to an Initial Public Offering. It’s an event or a process in which one particular company, in many cases a startup, attempts to raise capital by selling new crypto.
These cryptocurrencies investors may buy in the hope that the crypto value will increase or that a later exchange for services that the company has offered. Many ICO enthusiasts use the ICO calendar, which represents a handy tool for incremental profits and helps them really stay on top of the newest digital currencies.
So, what happens to be the originally anonymous payment currency? These non-existent “coins” are now the matter of ransomware payment, crypto-jacking, Dark Web purchases, and investment scams.
Now that you’ve learned what an Initial Coin Offering represents, it’s crucial to understand that there are a lot of ICO scams online that you must be aware of and learn how to avoid them. For example, in one of the newest scams, someone launches an ICO.
It’s much like starting your own business or buying a property and then offering “shares” for sale to investors. What’s so interesting about the most legal Initial Coin Offering of crypto is that the shares that one particular investor buys are for a non-existing object.
And here are the most common scams that have fooled a lot of people lately:
“Bounty scam” is the term used to describe a situation where an ICO failed to pay out promoters who were promised financial rewards for numerous PR activities in the form of tokens. These activities were promoting the project on:
● Media Channels
● Posting on Social Media or Blogs
● Translating and localizing documents
In the case of the promoters and developers, who collected funds for an Initial Coin Offering, one ICO suddenly disappeared, which means that investors were left without any information. This situation and ICOs we categorized as “exit scam”.
“Previous scammers” is another ICO scam in which the same group of developers actively conducted the same kind of scam in other projects. “Airdrop scam” represents a scam for numerous incidents in which the scammers stole private keys from innumerable users.
It is possible if some scammers create a “booby users and trap” expecting to receive tokens that are free of charge and click on the links. In this way, they’ll be giving away their private information and lose their coins.
As we have seen from the attached, scams in the ICO are widespread. Therefore, it is essential to recognize and avoid them in a wide arc. It is best to “prevent a problem rather than cure”, so think carefully about everything before embarking on this adventure. Good luck!