Just any human or vacuum cleaner (just kidding) can up and create their own crypto token because they have the cross-disciplinary knowledge, skills and necessary tools to curate the tokens. Many companies like the popular electric car company, Tesla, have the tokenized version of their shares for sale. The same way we have actual companies launching real Initial Coin Offerings (ICO) is the same way we have shams posing as companies releasing ICO and tokenized scams that trap innocent people.

Crypto to the Moon

The appetite for crypto has grown tremendously as the nascent technology is enjoying mainstream adoption. Newbies and those that consider themselves experienced crypto holders have to be wary of overly juicy offers which may or may not be from scammers. The key word is to be careful.

Frankly, cryptocurrencies are speculative and volatile assets. A high net worth investor who has made quite a considerable number of smart investment choices will stash her or his money in such volatile assets is what scammers are capitalizing on to issue and entice investors to lock their funds in fraudulent tokens or ICOs.

Conduct Your Due Diligence Investigation

Determining which crypto investment or staking opportunity to pick from the vast majority of what we have may seem daunting. No one can say for sure what company is going to scale or tank in the coming days but conducting proper due diligence investigation on the person who introduced you to the crypto scheme or the startup issuing the ICO will go a long way to save us all from stories that touch. Right?

How to Run Through A Scam and Leap Over Fraud

• Know the Promoters/ Developers/ Startup: It is important to Do Your Own Research on the promoter of the crypto. It is the way to go. What is the company? Is the Startup duly recognized and registered? Who are the directors and shareholders of the company promoting the crypto scheme? What is their track record? The development and admin team behind the project really determines what the future of the project is. Be sure that the accounts of those who promoted the scheme are not fake. Countless times, some people have added me to fake Binance lists on twitter. Beware of the many inventions of scammers. Be worried if you cannot find a trail of the developers or promoters on the worldwide web. Should your findings reveal that the developers have millions of followers with no engagement, please be wary. Find out if they have the necessary and relevant skills and experience they tell you they have?
• What is the Token Program About? : Please read up the Company, ICO or project’s white paper. This is the breakdown of their plans and crypto program. When dissecting the white paper, try to understand the background, purpose, goals, plans, timeline to execute and all of that. Concrete White plans over flashy web pages any time, any day. Check how sound their strategies and plans are. Do not go for flashy white papers, go for sound strategies, plans, legal compliance, business model and targets. Please pass over schemes that have no white paper plan. Although it is not impossible for an ICO to present a quality white paper, dissecting the company’s white paper gives you an 80% firewall against scammed in broad daylight.
• Analyse Tokens in the Market: Take your time to review the historical data of the company’s token sales. How are the sales figures doing over time? Who made the token? Find out that it is the company curating and selling the crypto itself. May we not fall into the hands of scammers. Make sure the company is not trying to make the progress of their crowdfunding via an ICO a secret. This is a loud yellow alert. Swerve. Please do not follow the noise or the crowd. Do your own research. There is a saying that when a buzzing opportunity hits the news, it is already too late to rush in. Those that will make bucks off of it stashed their money in before the token became noisy or even hit the news. Watch for when the noise is down and carefully make moves.
• Get Rich Quick Will Get You Poor: Beware of the Get Rich Quick Syndrome! It can make you become poor and probably in debt quicker than you think. Whatever sounds too good to be true probably is. Please take note this piece is merely for informational purposes alone and not construed as business or investment advice. Please conduct your due diligence before the execution of any decision based on this article.

We will love to hear from you, have you ever been scammed?  Please let us know your experience via the comment section below.

The writer, Taiwo is a transactional legal practitioner in the Tech and IP space. She is glad to answer your questions and know your experience via the comment section below.

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