ICO Scams
Many people are excited about cryptocurrencies and feel an urgency to get in on the trend. Consumers can purchase cryptocurrencies and use them to make transactions or to trade them. In this environment, ICOs or Initial Coin Offerings are becoming more prevalent. Although it is possible to make some money from these investments, there are unfortunately many ICO scams.
It should be noted that ICOs are risky, even when they are legitimate. It is important to use due diligence before investing in a new type of cryptocurrency and research the individuals and company behind the deal. Also, invest in ICOs only through an ICO platform. Be as careful with ICOs as you would with avoiding a forex trading scam. If you have been the target of an ICO scam, contact professionals, right away.
Broker Complaint Registry is the right place to turn when you have been the target of an ICO scam or another type of fraud. We consult with clients and refer them to experts who can pursue their case in detail and work to investigate the broker, and in many cases, succeed in fund recovery. Talk to us today, and we can provide guidance on how to deal with the claim.
What Are ICO Scams?
ICOs or initial coin offerings are introductions of a new type of digital coin to the market. It is a chance for investors to help launch the coin and to make money on the premiere of a new cryptocurrency.
ICOs are becoming more common. Since the introduction of the first digital currency, bitcoin in 2008, thousands of other coins have been added to the digital coin market. Unfortunately, along with real ICOs, there are also ICO scams that merely take investors’ money and either claim the coin launch failed and keep the money or stop communication entirely.
It is common for cybercriminals to create frauds out of risky investments. This is the principle behind crypto scams, forex trading scams, and ICO scams. The idea is that if a trade is risky, it will be easy to convince the consumer that they have simply lost money.
In addition, those who invest in risky assets or deals may be less likely, on a psychological level, to go after scammers since they knew they could lose their money anyway. This may or may not be true, but there is a kind of logic to this thinking that scams rely on. The way to fight this psychological battle is to refuse to put up with being scammed and report forex trading scams and ICO scams. The issue of how risky an asset is should be irrelevant when a crime has been committed.
In addition, those who invest in risky assets or deals may be less likely, on a psychological level, to go after scammers since they knew they could lose their money anyway. This may or may not be true, but there is a kind of logic to this thinking that scams rely on. The way to fight this psychological battle is to refuse to put up with being scammed and report forex trading scams and ICO scams. The issue of how risky an asset is should be irrelevant when a crime has been committed.
Still, you will see more scams in dicey areas, such as forex trading scams and crypto scams than you will for less risky assets. ICO scams are common also because of the popularity of cryptocurrency and the haste many consumers feel to get in on the next lucrative deal. The fact is that only 10-20% of legitimate ICOs end successfully, and the chances of losses, even in the best of circumstances, are higher than gains.
However, many people enjoy risk and realize the rewards can be great too. They may trade only money they are willing to lose, which can give ICO scam artists a false justification that the trader was already prepared for the prospect of losing their money. This of course does not square with moral logic, but it is how scam artists operate.
However, many people enjoy risk and realize the rewards can be great too. They may trade only money they are willing to lose, which can give ICO scam artists a false justification that the trader was already prepared for the prospect of losing their money. This of course does not square with moral logic, but it is how scam artists operate.
How Common Are ICO Scams?
Unfortunately, the vast majority of ICOs are not legitimate. According to an Investopedia survey, 80% of ICOs are scams. However, it is not difficult to eliminate most of these from the list as long as would-be ICO investors understand that casual deals on social media should be absolutely avoided. Using only ICO platforms and researching who is behind these deals thoroughly can cut risks of falling for ICO scams substantially.
What Are Some Examples of ICO Scams?
Every ICO scam operates somewhat differently, but the pattern tends to be the same. The typical outline of an ICO scam is that there is a post or an ad on social media urging people to invest in a new type of digital coin. There will always be a sense of haste and they will say that the opportunity to invest will only last for a few hours.
Those who are interested in investing are told to transfer money via cryptocurrency directly to a personal account. The ICO scam artists will either disappear entirely or say that the investment failed.
They may even claim that those who invested need to send more money to retrieve their funds or that they can get in an even bigger opportunity if they combine the first amount with additional funds. Of course, this is a way to maximize the amount retrieved. Before disappearing, the scam artists may also ask for sensitive information, such as social security numbers, bank or credit card information, and photo IDs.
How to Avoid ICO Scams
Once you examine the methods of ICO scams, you will learn to recognize them and more easily avoid fraud. Here are some tips to keep your money and data safe from ICO scams:
- Invest in an ICO only on an ICO platform
- Research the people or company behind the ICO
- Do not send money to personal accounts
- Ensure there are payment options
- Do not be fooled by a sense of haste
- Do not click directly on links
The best way to deal with ICOs that take place entirely on social media is to ignore them. Social media can be used for marketing, but you should be referred to an ICO platform and not social media itself. Check that those sponsoring the ICO have a secure website and a solid background in financial products and cryptocurrency.
This may sound ironic, but avoid ICOs that accept payment only in cryptocurrencies. It is easier for a scam artist to disappear with funds that are paid in digital currency, but if they offer several options for sending money and only through the platform, that is a reassuring sign.
If you have lost money to an ICO scam, it is essential to consult with professionals immediately
Have You Been the Target of an ICO Scam? Broker Complaint Registry Will Help
Contact Broker Complaint Registry experts if you need assistance with a complaint relating ICO scams. We deal with a variety of issues, including ICO fraud, data theft, forex scams, and crypto complaints. Our team will refer you to experts who have vast experience dealing with regulators, banks, and law enforcement. We will provide advice and give you valuable guidance to help you resolve the issue.
