Red Flags to Watch Out for When Investing in an ICO


There is no denying that ICOs are all the rage at the present moment. Even In the current bear market, ICOs are being released by the dozen week after week. All of the hype may have you interested in taking a punt on an ICO. This is especially true if you are already a somewhat experienced crypto investor who wants to delve deeper into the market. This could be in search of gains or perhaps you are very passionate about a certain project. Whatever your motivation, you should be able to recognize the key point of an ICO and what separates good, bad, and ugly. Here are a few pointers:

Teamwork Matters

You can go a long way to learning about the validity of a project based on who is involved in the team. Starting an ICO is no small feat. That usually means there should be at least 8-10 team members encompassing all business areas.

If there are only a small number of team members or a little reliable information on their backgrounds. This could be taken as your first warning sign to be careful.

Community Integration

The blockchain community is still relatively small. Small and strong. This usually means that in order to raise the required capital, the heads of the project will need to engage with this community successfully. This means establishing solid profiles and engaging on forums such as BitCointalk. You should monitor these communications to obtain feedback for good or bad from other community members.

A lack of presence in these vital areas and lack of a good quality LinkedIn profile containing in-depth information is another huge red flag if it occurs.

Poor Design and Marketing

One of the most obvious warning signs of a shady ICO is a poorly written Whitepaper or a poorly designed website. These simple matters should be a pre-requisite of any investable project in any industry, let alone one which proposes to harness the latest innovations in blockchain technology. This could be a clear indication to run very fast in the other direction.