In this day and age, individuals are very excited about cryptocurrency. People usually purchase cryptocurrency for trading or making transactions with them. As the utilization of cryptocurrency grows in popularity and acceptance by society, investors and firms are interested in using ICOs to raise capital. This is also where the Initial Coin Offerings(ICOs) and ICO scams come into picture.

Even though there is scope to make funds through these investments, ICOs are very risky. Therefore, while investing your funds in new coins, you should thoroughly research the people and the firm behind the tempting offer. Furthermore, before entering this platform, you must take precautions, like investing in ICOs only through a trustworthy ICO platform. And also learning about how to avoid ICO scams and what to do if you have fallen for them.

What are ICO Scams?

An ICO scam exhibits fraudulent activity with evil intent. If any legal authorities identify it, they will announce legal actions against firms encouraging these activities. ICO stands for initial coin offerings. The ICOs are considered fundraising methods that most firms and startup organizations use. Corporations looking to increase funds to create a new app or coin launch an ICO as a technique to improve funds.

ICO is the crypto industry equivalent to an IPO, but the difference between them is that the IPO is ultimately settled by firms. In contrast, ICO is usually for young startups, which are risky to use. Even though some ICOs have yielded significant returns to investors, various others have turned out to be ICO scams. We can say that ICO scams are the black spot of the cryptocurrency asset industry.

Ten Biggest ICO Scams:

Here are the top ten ICO frauds list:

The classic exit scam:

An ICO is classified as a “bounty fraud” if it failed to pay out promoters who had been promised cash rewards (often in the form of tokens) for PR tasks, including promoting the project on forums, Telegram channels, messengers, translating and localizing documents, publishing on social media or blogs.”ICO exit scams” are where the creators and promoters who raised the money for it abruptly vanish, leaving investors in the dark.

Exploding airdrops and sophisticated frauds:

We noticed numerous allegations of ICO scams where the same developers were allegedly running schemes for various businesses. In our analysis, this kind of scam comes from “prior crooks.” The term “airdrop scam” describes fraudsters stealing users’ private keys. This might occur if con artists set up a booby trap and users click on the links expecting to obtain free tokens, giving away their data and ultimately losing their currency.

Exchange fraud:

Additionally, it appeared that developers who wanted to trick investors preferred to launch their ICO at a shady exchange. An “exchange scam” is used to describe this kind of fraud.

Copy-paste scams:

We noticed that it is a deceptive strategy utilized by scammers, copying the white paper of a promising ICO and launching it under a similar or different name. Scams of this kind are known as “white paper plagiarism scams.” In this regard, individuals are thankfully becoming more aware of this type of fraud and are now reporting it to Scam Recovery Expert.

Pumps and dumps:

Another fraudster tactic is “pump and dump,” but it may not always be evident at the start of an ICO. Investors and traders hurry to purchase the token early on when the price is still low; some even do it at a high cost out of concern that they will miss the chance to earn an easy profit. Then, the price drops sharply and suddenly when the con artists have finished the sales.

Blockchain Ponzi schemes:

This kind of fraud often involves promising victims future returns in exchange for an investment in a product or service connected to the ICO.

URL fraud and phishing attacks:

We also saw a new method of defrauding investors that involves launching websites that are conceptually and formally comparable to existing enterprises. These websites may con unsuspecting investors unaware of the original websites, causing them to lose their money. In our study, this type of scam is referred to as a “website scam.”

Porn scam:

We also noticed what we refer to as a “porn scam,” which is becoming increasingly common among con artists. In this scam, an initial coin offering (ICO) pretends to provide premium access to its porn site (and products). Pornography is often illegal or despised, and hence scammers may utilize this scheme since victims are less inclined to report it.

False, dead, or both:

We retrieved ICOs that had been “listed” by dead-project aggregators DeadCoins and Coinopsy, examined them, and devised 13 potential ways scammers can deceive investors. We classified an ICO as “fake” if a member of the Bitcointalk forum pointed out that it had a false team, phony project, fake wallet, fake social media, or fake trading.

Manipulation of the market and pre-mines:

We found another type of fraudulent ICO as a “pre-mine scam,” directed to the sharing of tokens among inventors and supporters following the final token sale instead of burning the unsold tickets as is proper in such circumstances. This defrauds investors simply because a more considerable token circulation quantity indicates a lower token price. If developers keep a sizable fraction of the tokens from the pre-mining phase, the token market can also be influenced. Interestingly, a recent study also discovered a connection between pre-mining activities and bitcoin settings.

Red Flags of ICO Scams:

While researching an ICO, a few red flags may indicate that the investment is not worth pursuing. Here are some of the warning signs to watch when considering an ICO investment.

• Lack of Transparency:
  Transparency is one of the most vital things to look at in any investment. On their website, you should find details about the project team, terms and conditions, their experience, current track record, and how the income increased in the ICO. If this detail is unavailable or you find it challenging to see, it could be a red flag.
• Unrealistic promises:
  Always be aware of any project that appears to be making unrealistic promises about the future funds of their ICO. If the plan structure seems unrealistic, it is a sign that the team doesn’t have a complete strategy for using the funds.
• Incomplete or no Whitepaper:
  The Whitepaper shouldl explain the plan and why the clients should believe it. However, if it is not clear or incomplete, then it is an ICO scam./span>
• Do your research:
  A legal ICO firm spends a plethora of time, money, and energy on marketing its team, coin, and firm. So do your research on the internet about the firm. It is a scam if you don’t find any articles, press releases, or details about the project that are published.
• Little or no team information:
  Arriving in the world of startup, one can see the world’s most excellent thoughts go to waste entirely because the wrong team was behind them. In my opinion, no idea or project will rise above a bad team. So basically, we should look at the team before involving in any ICO. It is a scam if the team members are not listed on their website. So, be cautious.

How do ICO Scams work?

Scammers usually target individuals who are craving money. The demand for cryptocurrency and the intensity to get in on the next deal has led to many ICO frauds. Unfortunately, the chances of failure here, even in favorable situations, are very high compared to profits. Cybercriminals are pretty much adopted to scam individuals through risky investments.

ICO scams take the investors’ funds and tell them that there was a failure in the coin launch and hold the funds with them or shut them out. The idea behind the ICO scams is that it is easy to convince the investors that they lost funds since the trade is risky. Traders are also likely aware that they could lose their funds. Scammers usually end these scams if one decides to report them.

Many individuals usually enjoy hazards and are inviting scams. They typically trade funds that they can do with any help available, opening a door for the scammers to enter. Every ICO Scam follows a pattern that usually starts with a post or a social media advertisement that usually requests people to invest in a new type of digital currency. Then, they provide you with “limited time offers” forcing you to make urgent decisions in their favor. Finally, they promise they will be the next booming topic and generate huge returns in no time.

Finally, they ask you to transfer funds through cryptocurrency to their bank account. The ICO fraudsters will vanish or give a statement that the investment failed once they have your money. They even try to extract more funds by informing them that they need to send more money to reclaim their money or that there would be a more substantial income if they combine the initial payment with added funds. The con artist sometimes asks for sensitive personal details like photo IDs, social security numbers, and bank details.

How to Identify ICO Scams?

If you want to defend yourself from the financial losses and the mental stress that comes with it, you must know how to identify these scams at the right time. Here are a few ways to determine the ICO scams.

• Read Whitepaper:
  Review the project’s Whitepaper for more details. It helps outline the context, objectives, strategy, financial models, SWOT analysis, and schedule for any blockchain-related project. At any cost, stay away from organizations without whitepapers.
• Understand the Team:
  Do a thorough background check on the deal’s crew. It is necessary because executives and developers are critical to the victory of any ICO. Verify their company online on sites like LinkedIn. Take the initiative to review their credentials, explore the development team’s experience, and resolve whether or not their guarantees are realistic and believable.
• Evaluate their promises:
  Prior to determining whether or not to work with an ICO company, it is essential to evaluate their promises. When everything appears to be in order, you can start investing; however, if something about an ICO raises doubts in your mind, you should usually think again before investing because your gut instinct is seldom wrong.

How to Avoid ICO Scams?

You may quickly identify and prevent ICO fraud by looking at their tendencies. To safeguard your funds and details from ICO scam,

• Use an ICO platform as the only way of investment
• Properly analyze the people and firms behind the ICO
• Avoid the transfer of funds to personal accounts
• Look the provision of payment options
• Prevent rash decisions.
• Do not visit unsolicited links.

Disregard ICOs that only live on social media. You should be required to use an ICO platform instead of just social media. Look for a safe website that knows about bitcoin and financial items.

Avoid ICOs that only allow cryptocurrency payments, making it easier for scammers to vanish with funds paid in virtual currency. On the other hand, if there are numerous ways to send money just through the platform, it is a comforting sign.

What To Do If ICO Scams have scammed you?

Even though a significant part of ICOs are scams, one can avoid them by exercising care, avoiding unprofessional trades on social media, and doing extensive research. In addition, being cautious before investing in an ICO is essential due to the fantastic tricks developers employ to dupe investors. So put some effort into it, stay vigilant, and investigate it before you invest.

However, we are here to help if you find yourself funding an ICO fraud. Working closely with regulators, banks, and law enforcement, our financial recovery specialists have extensive experience. Scam Recovery Expert is the best place to go if you have fallen victim to an ICO scam or fraud.

How to get your money back from ICO Scams?

If you feel you are a victim of an ICO Scam, contact Scam Recovery Expert, where the expert team will help you recover your funds from the scammers. For that, you need to obey some guidelines.

• Gather all the proofs:
  Collect as much information as possible before making bold decisions or announcements. Everything about the scammer who contacted you, any advertisement that attracted you, investment acknowledgment, and the screenshot of the payment which you have made.
• File a case with Scam Recovery Expert:
  Once you visit the recovery firm, hand over all the documents to our expert team. Then you can be free of tension as our experts take that burden from you, and they will fight instead of you. Also, provide your phone number and address so that one of our team members can be in touch with you until you receive all your scammed money.

Why is Scam Recovery Expert a trusted name in the world of ICO Scams Recovery?

A reliable company that offers legal and financial assistance, Scam Recovery Expert, offers subset services like consolidation, settlement, management, and fund recovery.

We extrapolated that the time had come to create a business entirely focused on thwarting ICO scams by hitting them where it hurts, as well as a business plan that would increase the possibility of a chargeback for our clients while reducing their expenditures.

Why Choose us?

We provide our clients with a free, no-obligation consultation to set up a chargeback of the fraudulent transaction before taking on a case.

• Leaders in the Field:
  Our team is made up of international legal and anti-money laundering experts that can handle cases of any complexity on a global level.
• Clients of Quick Processing:
  Scam Help profit from the depth of our team’s expertise. We present your case to the bank or other financial institutions in question in the most expertly, shortening the processing time and improving your prospects of a favorable settlement.
• Personalized Dispute Resolution:
  We handle every customer uniquely, ensuring a thorough investigation of every problem to provide the best solution.