Scammers are a big problem in the blockchain community, and they’re getting increasingly sophisticated. We’ve already published a blog post where we’ve listed some of the most common scam practices, and we highly recommend you read it. But there are also some other elements in an ICO structure, which immediately signal a red flag.
Let’s start with communication. Most ICO projects communicate in English which is not their native language. Some grammatical mistakes are bound to happen, and it’s ok. But if it looks like something that Google translate would spew out, watch out.
Engaging supporters in an honest and direct communication is a cornerstone of building a successful ICO. Be attentive to the way projects communicate and react because there can be some clear telltales that something is not right:
- The team gives hazy and unclear answers to straightforward questions,
- suddenly a throng of people with the same name appears on the project’s communication channels, claiming to be part of the team,
- the team stops communicating with the community after the crowdsale begins,
- reports of scamming attempts on the team’s public channels have been filed, and the team doesn’t do anything about it.
It has to be public
Clear and well-defined terms of participation are also very important. You should pay attention if contribution ETH address is published only in one, public place (don’t send your funds to any addresses that have been sent to you via DM or email), while bonuses and all relevant dates must be set and predefined well in advance. Any changes to these terms must be announced publicly, to all, so be careful if the team doesn’t do so or if the official team does not endorse the change. And if in doubt, you should always have the chance to contact the team in person.
Whitelists are another thing as well. Your ETH address is your private information and should be kept private, that’s why at Cofound.it we’ll never disclose our whitelist to the public. Any project that does so is negligence incarnate and a ticking scambomb waiting to happen.
You should also be on the lookout which wallets a project is using in the crowdsale. It has to support the ERC20 standard for tokens, and good examples are MyEtherWallet, Parity and Jaxx. Don’t send funds directly from your exchange wallet otherwise, they’ll be lost.
To wrap it up, be aware how the ICO space is developing, keep an eye out for anything suspicious, and remember to follow some of the below-listed rules to keep you safe:
- Never click on links from unknown sources, it is always preferable to manually visit the site by typing the URL into your browser (for example www.myetherwallet.com). Bookmark those websites from where you send your ETH and use only those bookmarks. There have been cases where scammers have copied entire web pages, posted their own ETH addresses and even bought Google and Facebook ads for this scam pages. The difference in promoted URLs was in just one letter in the company name or in the domain name (for example .co instead of .com). So be extra careful when clicking on unknown links.
- Install this Chrome Extension that warns you about phishing web pages.
- Our team of administrators and moderators is on constant alert in our Slack and Telegram group. All spammers, scammers and phishers are immediately removed from a group.
- We have an excellent support if any of our users need help with the contribution to the crowdsale or anything else.