The rising hype around the IEOs in the past two months has made the crypto scene again somehow full of excitement. And yet, again, on the verge of a risk of a new wave of scammers and fraudulent projects sneaking just around the corner.
But how, you may ask, can an Initial Exchange Offering (IEO)be fraudulent or scam in the first place, since the exchanges make due diligence on every project and coin that they have launched on them? Would they sacrifice their reputation and allow a project that doesn’t represent the values of trust, legitimacy, transparency, value-driven ambition, etc?
This topic has received a wider attention, following a further discussion in the most popular forums. People argue that very soon scammers will find ways to make IEOs their new source of reaching to people.
The latest thread on the subject discusses that scammers will start building new exchanges just to lure victims. Through these exchanges, they will start promoting fake IEO projects just to make investors participate. And after a while, they will disappear in thin air.
Our most valuable advice still is: Look and participate only in IEOs that are launched on popular exchanges that have proven volume. Reputable exchanges are not in the fraud business. They risk immediately losing their entire client base, and their whole business, if they are seen to be promoting a scam or fraudulent project.
Some other suggestions on our behalf. Most of them are related to thorough research on the team.
- Double and even triple check the people you communicate with.Check their LinkedIn profiles, ask for direct calls or communicate in official e-mail correspondence.
- Are the team or founder anonymous? If they are not willing to share their true, public, identity, then the project is most likely a scam.
- What sort of people are behind the team? Perhaps the single most important success factor for any IEO or cryptocurrency is the developers and administrative team behind the project. For that reason, it’s increasingly common for scammers to invent fake founders and biographies for their projects. The best protection against this fraudulent tactic is to thoroughly research the individual team members of a project before you invest. It’s a bad sign, for example, if you’re unable to find any information about a particular developer or founder on LinkedIn or other social media outlets. Even if profiles do exist, check to see if their activity seems to match up with the number of followers and likes they accrue. Individuals who rarely engage with their followers and yet have thousands of fans may not be real.
- Check if the project already has an MVP. This can be a strong sign that the team behind the IEO is actually working on the execution side of the platform/product.(Our Alpha version will be released on the 8th of April.Check our article on the subject and subscribe to be one of the first to test it).
In the meantime
As our official community groups and chat organically grow, we also started to encounter fake profiles of our co-founding team members, trying to reach out to people in our community and ask them for ETH.
It looks like this is more than just normal, as the crypto scene, in general, is the very image of anonymity. We would like to officially say, none of our team will ever contact anybody and ask for ETH.
That’s all folks! Keep us posted!
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