“I have nothing to do with this project. They have added me as an advisor without my consent or permission. It’s a SCAM.”

“Cryptocurrency startup disappears with $1mn raised in the recent ICO. Founders leave no trace behind.”

“A Crypto VC Firm Going Public With $100M CAD Falsely Touted 4 Blockchain Stars As Advisors.”

“I invested in scam ICO and lost my money. Please help”

Sounds all too familiar?

My news and social feeds are overloaded with such updates these days. And the deeper I dig, the more severe it gets.

If you think about it, the scams and frauds in the crypto space aren’t something that have risen overnight. The crypto community has been dealing with continuous scam attacks since early days of bitcoin. But the frequency and the magnitude of such attacks are definitely going up and so is the number of people falling prey to such scams.

ICOs & Scams

As crowdfunding via Initial Coin Offerings (ICO) becomes ever more popular, the need for proper due diligence on projects that are seeking funds has never been more important as scams and frauds are increasingly prevalent in the blockchain space. To achieve funding goals, many ICO projects have resorted to making fraudulent claims of the team members and advisors they have.

Let’s take a look at some examples:

Project being called out by the individuals that were listed as an advisor without consent

The same thread!

One of the scam companies pulling an exit scam after raising money in the ICO. Excerpt from https://cointelegraph.com/news/dont-believe-the-hype-the-five-largest-ico-exit-scams-expert-take

Scamsters haven’t spared our team members either!

Our CBO, Dipesh Sukhani along with the other individuals on the project web page, was found to have been listed as an advisor without consent

How easy is it really to create a scam project?

Well, unfortunately, really easy. Let me give you a simple recipe.

Create a fake project with a catchy name and brand. Use buzzwords and create a good landing page. Copy a good whitepaper. Or buy on fiverr Create fake identities / Use established identities as your team members and advisors. Also make sure your team section shows enough developers. Need some faces? Use http://uifaces.com/ to get professional random faces. Market the “ICO” Create hype Collect funds

Easy, ain’t it? And scary? Hell yeah!

How could we avoid it?

We can not stop people from creating scams. But we can definitely spot and avoid them.

Scrutiny (DYOR)

Do your own research.

Read the whitepaper thoroughly

Check if the company is incorporated as stated

Do due diligence on the listed team members and advisors

Check if development is active via github and bitbucket

That still does not guarantee the authenticity of the project nor does it validate the team members’ and advisors’ connections with the company.

How to spot the scams then and how to avoid them? Are there any blockchain police to help us?

Indorse is coming up with an innovative new feature to help solve this problem and make the ICO space scam-free!

Stay tuned for the updates!

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