Go to the list of all blogs
Allana's Avatar
published in Blogs
Feb 25, 2021

How to Spot a Fraudulent ICO

Initial Coin Offerings (ICOs) remain a popular way for blockchain-based startups to raise money, offering tokens to investors in exchange for fiat money or cryptocurrency. Companies have gravitated toward ICOs as a method to crowdfund their businesses without losing control to VC firms over operations and decision-making.

But ICOs have also drawn scrutiny from both federal officials and stakeholders for a lack of regulation that can lead to fraudulent offerings and fleeced investors. The SEC has taken steps to mitigate these threats, but the risk still exists in the absence of comprehensive regulations. What distinguishes a fraudulent ICO from a legitimate one?

Even in crypto’s wild west, the old adage still applies – if the return on investment (ROI) seems too good to be true, it probably is. Bitconnect offered investors a 120% annual ROI before disappearing with their investors’ money, while LoopX stole $4.5 million in a February exit scam. Some companies have even managed the feat more than once: Shenzhen Puyin Blockchain has pulled off successful thefts from three ventures – ACChain, Puyin, and BioLifeChain – to the tune of $60 million.

Legitimate startups will use a trusted escrow service to hold coins until particular conditions for the sale are met. These relationships will be clear and verifiable. If an ICO foregoes escrow or asks investors to send funds to a personal crypto wallet, it is likely that the sale is a scam.

It is important not to take shiny, professional-looking websites at face value in the ICO world. While somewhat counterintuitive on the surface, closer inspection reveals why – it is easy for those with malicious intent to promote trust via a nice website and fleshed-out whitepaper. Would-be investors more interested in massive returns than substance might miss the underlying signs – buzzword-heavy descriptors, a distinct lack of substance – that characterize fraudulent ICOs.

Equally vital is to look for real, substantial evidence of blockchain development to back up any claims made. No sample code on a repository like GitHub is a warning sign; if the code exists, it is important to have someone with technical know-how evaluate it for legitimacy. Message boards are also useful to see what crypto enthusiasts have to say about a project – while not necessarily the final word, it is important to take those opinions into account before investing.

Researching project timelines, patents, and other evidence is imperative for spotting a fraudulent ICO. This does not need to be an investigative reporter-worthy deep dive (though more research never hurt anyone) – a basic online search can reveal along with their resume. Little or no experience with blockchain projects is a red flag; legitimate project associates will also have contact information for potential investors to reach out with questions.

No amount of research can eliminate the risks that come with investing. But potential ICO investors will benefit from taking a good, hard look at what’s on offer. A clear, transparent project backed by technical expertise is a safe bet – a fluffy, codeless, information-deficient ICO is not.

Unsure of What Cryptocurrencies to Buy and Sell, and When to Buy and Sell Them? Ask A.I

You can find help with Tickeron.com. Tickeron has developed Artificial Intelligence capable of spotting patterns and trends in the cryptocurrency markets, and the A.I. can deliver trade ideas straight to your inbox. When the AI confirms a bullish or bearish pattern, it will alert users to the pattern and provide a target price for where it thinks the cryptocurrency is headed. Users can use the A.I. to track just about any cryptocurrency of your choice.

You can learn more and even start a 45-day free trial today. Get started on tickeron.com.  

Interact to see
Advertisement
Paper wallets are extremely useful tools – beyond being one of the most popular and secure cold storage methods, they make it simple to transfer coins between owners.You can access the funds on your paper wallet by “sweeping” (or importing) them to either a live wallet (like Trezor or Exodus) or an exchange service (like Coinbase). Most services allow you to import them directly from your wallet’s private key, but there are two key exceptions.
Learn the 27 essential intraday trading rules that every manual trader should master—and discover how Tickeron’s AI platform applies them automatically for consistent, emotion-free execution and smarter, real-time decision-making.
#investment#trading
A $2 trillion sell-off has investors asking: is 2025 the next dot-com crash or a replay of the 2008 recession? This deep dive compares both scenarios, outlines warning signs, and reveals how AI-powered trading strategies can help navigate rising volatility.
#trading#investment
New to trading? Discover 21 powerful lessons every beginner must learn—and see how Tickeron’s AI Double Agent strategies apply them in real time. From mastering risk to managing emotions, this guide helps you trade smarter, safer, and more confidently.
#investment#trading
From the railroads of the 1920s to the AI giants of 2025, market history shows that extreme concentration often precedes massive bubbles and crashes. This article explores five key turning points and how Tickeron’s AI helps traders navigate today’s bubble-prone landscape.
#investment#trading
U.S. tariff tensions rocked markets this week, sending tech stocks into retreat and safe-haven assets like gold and the yen soaring. As investors brace for major earnings and global policy shifts, volatility remains high across equities, currencies, and commodities.
#investment#trading
Tesla’s Q1 2025 earnings could surprise investors as the EV giant looks to rebound from last quarter’s miss. With lowered expectations and increased volatility, Tickeron’s AI-powered strategy helps traders navigate both upside potential and downside risk.
#investment#trading
Gold is on a historic run—up 29% YTD with record-breaking inflows and growing macro tailwinds. Discover why smart investors are eyeing gold, silver, and miners for opportunity, and how AI trading tools are unlocking new ways to profit from the 2025 gold rush.
#investment#trading
Tickeron launches its innovative Double Agent Trading Bot, combining long NVDA trades with hedged NVDS positions. Using AI-driven pattern trading and real-time risk management, the bot achieves a 75% success rate, revolutionizing automated trading strategies.
#trading#investment
Tickeron’s AI trading bots are setting new standards in finance, achieving up to 86.6% win rates across leveraged and sector ETFs. Powered by advanced Financial Learning Models (FLMs), Tickeron’s AI delivers precision, adaptability, and real-time trading success.
#trading
Wall Street expects strong profit growth from the Magnificent Seven tech giants in 2025. Discover how to trade Apple, Microsoft, Amazon, Nvidia, Tesla, Meta, and Alphabet using AI-powered Double Agent strategies and smart hedging with inverse ETFs like QID.
On May 2, 2025, a diverse group of companies across energy, financial services, basic materials, consumer discretionary, and healthcare will release their Q1 2025 earnings.
In April 2025, five tech giants—NVIDIA, Tesla, Meta, Palantir, and Amazon—each surged over 40%, driven by AI breakthroughs, strong earnings, and market momentum. Discover what fueled the rally and how Tickeron’s AI trading bots helped investors outperform even these star stocks.
#investment
Markets ended April with mixed signals—gold slid on trade optimism, Big Tech lifted the Nasdaq, and Bitcoin steadied near $94K. With U.S. GDP contracting and job growth beating forecasts, investors brace for more volatility amid tariffs and central bank moves.
In a turbulent market, Tickeron's AI-powered Double Agent Bot is outperforming traditional strategies. Leveraging real-time intraday signals and inverse ETFs, the bot posted a +9.77% quarterly gain while the S&P 500 dropped 9.28%. Here's how AI is reshaping trading.
#trading
As Warren Buffett announces his retirement, investors turn to his trusted Buffett Indicator—a ratio of market cap to GDP—as a key gauge of market valuation.
#investment
Markets move in repeating cycles—Accumulation, Uptrend, Distribution, and Downtrend. Learn how to recognize each phase and deploy Tickeron’s AI-powered Double Agent strategy to adapt, protect capital, and profit in any market condition.
#trading
Discover how confirmation trading techniques—like moving average crossovers and volume-backed breakouts—can improve accuracy and reduce false signals. Learn how Tickeron’s AI automates these strategies for smarter, faster, and more disciplined trading.
#trading
Hedge funds are ramping up bearish bets on small-cap stocks, with Russell 2000 short interest hitting new highs. As macro headwinds mount and technical support teeters, Tickeron’s AI Double Agents step in to navigate the looming sell-off with precision.
#investment#trading#artificial_intelligence
SPY’s Momentum Indicator turned bullish on April 25, 2025, signaling a potential trend shift with a 90% historical success rate. This article explores how economic scarcity, technical signals, and AI-driven tools like Tickeron’s A.I.dvisor shape investor decisions in volatile markets.
#trading