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ICOs Keep Failing: How Not to Fall for a Scam



There are, however, 5 good indicators showing whether or not an ICO is a scam, and if these raise alarm bells, it is probably best to find one that doesn’t.

If you have been trading in the cryptocurrency arena for the last few years, no doubt you have come across ICOs. For those of you who aren’t in the know, an ICO is initial coin offering made by new cryptocurrency projects. Typically, these offerings are made by way of crowdfunding as a means to draw investment to kickstart the currency effectively and provide traders and investors with the opportunity to pick up potentially valuable tokens at a discounted rate.

The tokens are sold on the premise of a successful launch with investors being able to cash in if the project is successful by selling their tokens in the future. So far so good, ICOs are providing a solid base for investment with the opportunity to make generous returns when the platform is live.

The problem is that ICOs are often scams. In fact, it was estimated by ICO advisory group Statis that 80% of all ICOs that went to market was in fact scams set up by fraudulent individuals looking to make a lot of money and disappear as quickly as they had emerged.

That does mean, though, that 20% of all ICOs are legitimate and profitable, but with 4 out of 5 being outright scams, how can you tell the good from the bad? And how can you make sure your investment is with an ICO that could yield lucratively in the future?

5 Ways to Identify an ICO Scam

To start, it is important to highlight that there is no fool-proof way in determining whether an ICO is a scam or not. In an ideal world, scammers would be easily identifiable, but the problems arise due to the sophistication employed by scammers to get investment. There are, however, 5 good indicators showing whether or not an ICO is a scam, and if these raise alarm bells, it is probably best to find one that doesn’t.


Tip #1 – Understanding the Development Team

This is critical and should be your first concern when considering whether an ICO is a scam. Development teams for these projects often have good track records that are independently verified through third-party sources. This is primarily because it is very rare that a grass-roots ICO project with no development history or credentials would be legitimate.

Familiarize yourself with the team behind the ICO, “google” their head office, check their educational and business history on LinkedIn. If a development team or individuals behind the project have already contributed productively to the crypto world then it might be a key indication that they are legitimate.


Tip #2 – Get to Grips with the Whitepaper

An ICO whitepaper is very much like a business plan. It should identify the key areas that the ICO is looking to address, how it intends to achieve its goals, and more importantly, it should outline any concerns that the developers have. This last point is something that scammers often overlook as they don’t wish to perpetuate any negative connotations attached to their offering. This is because they want as many people on board as possible.

A legitimate whitepaper will highlight areas that the developers are wary of as well as ways in which they intend to combat them. It will show careful planning and contingencies being put in place from the outset.

If the whitepaper seems too good to be true, it likely is!


Tip #3 – Examine the Token

The offering for an ICO will be made through either a token or some tangible currency system. If an ICO has been set up honestly, it will be relatively straightforward for investors to view the system and token performance. This information should be accessible so that you can discern how a token has performed over time as well as view current performance.

Marry this information up to the claims and projections in the whitepaper, is it feasible that the token can achieve results in the way that the developers are claiming it can?

If you can’t track token’s performance at all, it is a clear indicator that something is not right about the ICO and you should move on to the next one.


Tip #4 – Take Everything with a Pinch of Salt

Tying back in with the feasibility mentioned in the previous point, always err on the side of caution when evaluating the company’s claims. If an ICO looks very attractive, but after evaluation of its performance you have been discouraged by borderline or poor performance, it is best to steer clear rather than expect a turnaround.

Cryptocurrency, in general, is rife with exaggerated claims and hype, only legitimate platforms retain value regardless of this. So it is very important you trust your gut instincts when deciding if a particular project is for you. If something doesn’t look right or doesn’t ring true, don’t make excuses for why that might be and move on instead.


Tip #5 – Spread Your Risk

Even the most seasoned investors have fallen for ICO scams. This is because they often appear very real. It is worth mentioning that you should never put all of your capital into one ICO but rather look at other offerings and balance out investments to find a dynamic that not only works for you but protects you if one is a scam.

If you have been caught out by a scam, think carefully about the process you employed when selecting that ICO, establish where you went wrong or what can be done differently. If you can’t do that, it is perhaps best to steer clear of the ICO market and look to other fantastic opportunities in the crypto world.

Some ICOs have had incredible success, but the ICO market is currently littered with poor ICO options that are purely there to rob you. Always be inquisitive, ask questions and make sure you feel comfortable before investing.


Alert: Bitcoin Core Developer Accuses HitBTC of Scam



Luke Dashjr, a Bitcoin core developer is claiming that the cryptocurrency exchange HitBTC is a scam and the company is stealing money from the customers.

Luke Dashjr, a core developer of the original Bitcoin is claiming that the infamous cryptocurrency exchange HitBTC is a scam and the company is stealing money from the customers by not letting them withdraw their cryptocurrencies from the exchange.


Is HitBTC a Scam?

According to Luke Dashjr, HitBTC is surely a scam as the exchange is not letting him withdraw his funds from the exchange. The issue initiated when the exchange suddenly started to ask for personal information from Luke which according to him was not supposed to concern the exchange at any cost. The bitcoin core developer is also advising other people in the cryptocurrency space to withdraw their funds from Hitbtc.


HitBTC is shutting down the exchange accounts of people who are not complying to their KYC requirements, however, earlier the exchange did not have any KYC requirement. The exchange had earlier pledged to give a notification to the traders if there are any changes in the rules and policies of the company, however, Luke said that the company never sent any kind of notification at all.


Reply by HitBTC:

HitBTC replied back to the allegations very quickly stating that the withdrawal issue was due to the token swap of KIN which was going on at that particular time. They also asked Luke to send them over his details so it’s easy for them to find a solution for him.


Other Allegations:

HitBTC has been accused of scam and fraud by many people in the past including John Mcafee, one of the most famous personalities in the crypto space who called the company a fraud because of the withdrawal issues with MTC token.

Also, a complaint was recently made by a cryptocurrency trader and investor Trace Mayer who said that the company had frozen his exchange account while the Proof of Keys event was going on which was organized especially to expose cryptocurrency exchanges like HitBTC.

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Bitcoin ATM Fraud: Four Canadian Men Declared Wanted



Four men have been suspected and declared wanted by the police in connection with the Bitcoin ATM double-spending attacks.

According to a report published by the CBC. four men have been suspected and declared wanted by the police in connection with the double-spending attacks at Bitcoin ATMs. According to the report, a hundred and twelve transactions took place in just September 2018 out of which around sixty-six (half) of these took place in Calgary and others in Hamilton, Toronto, Winnipeg, Montreal, Ottawa, and Sherwood Park. However, the men that are suspected have unknown identities and the local police are seeking the help of the public in order to identify them.


Bitcoin ATM: Double Spend Fraud

Bitcoin ATMs installed in these areas had a zero-confirmation transaction which means that even without a single confirmation, the bitcoin atm allowed the withdrawals which made it possible for the suspects to perform double-spending in these ATMs.

The alleged persons performed a hundred and twelve transaction averaging to around $1800 per transaction in just ten days of time and made more than $200,000 out of it.


How does Double-Spending Work?

Double spend is made possible due to tools developed by Peter Todd, a bitcoin core developer who resides in Canada. The tool called replace-by-fee-tools allows the user to ‘unstuck’ and ‘stuck’ transaction by paying extra fees. However, the tools were not developed or endorsed for performing such criminal activity at a bitcoin atm.

According to Peter Todd, the double spend tool creates two transactions in sequence out of which the 1st transaction makes the stated payment to the stated address and the 2nd transaction double spends the same transaction with a transaction which has a greater amount of mining fee, making the payment only to the change address. Also, the user can choose to state that the 1st transaction additional OP-Return, Multisig as well as Blacklisted address outputs. As many bitcoin miners would not accept the transactions that have these kinds of outputs, instead they will accept the 2nd transaction that is a double-spend transaction which indeed assists the user to double spend.

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OneCoin Founders Arrested: Charged Billions for Fraud



Konstantin Ignatov and Ruja Ignatova, the founders of OneCoin Ponzi Scheme were arrested in Los Angeles airport on Wednesday, 6th March.

Konstantin Ignatov and Ruja Ignatova, the founders of OneCoin Ponzi Scheme were arrested in Los Angeles airport on Wednesday, 6th March. As per the announcement made by the US Attorney Office of the Southern District of New York, a US district attorney has charged the founders who are accused of securities fraud, wire fraud and money laundering by tempting people to invest billions in the cryptocurrency scam.


OneCoin was founded in Bulgaria in 2014 as a multi-level marketing project. The members of the project received a commission for attracting more and more investors to buy the OneCoin cryptocurrency. The network of the company grew massively and had already attracted more than 3 million investors globally.


According to the investigation, OneCoin made more than $3.77 billion in sales revenue and around $2.25 billion in profits between the 4th quarter of 2014 and 3rd quarter of 2016.


The district court attorney said that the founders performed an old-school pyramid scheme on a new-school program which compromised the probity of the financial system of New York and extracting billions from people in the form of investments.

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