The best way to protect yourself from fraudulent IDOs and sketchy tokens is to thoroughly research the project before investing in it. Here are 5 tips that may help you avoid losing money.

Tip 1. Explore the team

Presenting the team increases the trust in the project. And scammers also know that. Check the biographies of the claimed team members, then google their names and other projects they allegedly worked on, to get more info. Try to find them on Facebook or LinkedIn. Does the information match? Do they have enough friends or subscribers as for an industry leader? Are they active on social media? If the answer is three “no”, it’s a bad sign.

Tip 2. Scan the website

Now it’s time to estimate the visual part. Scam projects often have poor website design, spelling errors, no references, or links that lead to non-existing social media. If the project has a blog, check how active it is and how they interact with the community. No updates for a long time is also a bad sign. You may also find fake partnership announcements on the website. If, for example, the company claims to work with Binance, go to Binance website and check this information.

Tip 3. Look through the whitepaper

A cryptocurrency or ICO whitepaper is the foundational document for any project. Reading a whitepaper is not an easy task. However, just a quick look at the project’s whitepaper can say a lot. In some cases, fake whitepapers are full of unrealistic expectations, incompetence, math errors or non-existent financial models. Lack of a roadmap is also suspicious. And remember that projects offering no whitepaper at all should be avoided at all costs.

Tip 4. Find people’s complaints

Comments by real people can say a lot about the projects. You can find them on the project’s blog or social media, on Reddit or other forums, even in the App Store — if there’s a mobile application. Sometimes, even a few but very emotional complaints are enough to start doubting the project. May hundreds of laudatory reviews not cloud your mind: they could be written by bots.

5 Use additional tools

Special online applications can serve as an independent source of all information about a project’s token. With their help, you can see what’s happening with the token right now, track all transactions, hold a contract audit, check the liquidity status for a specific token etc. You can try Token Sniffer, Block Explorer, Unicrypt, Dextools and other programs to check a suspicious project. Just enter the name of the token, and the tool will find everything about it for you, even comments by people who’ve been scammed.

Just a fact

In 2021, crypto scammers stole a record $14 billion in cryptocurrency — that’s more than any other payment method. Thieves evolve and create more elaborate schemes, so be attentive and follow Alpha Guilty for more useful tips.