• July 2018
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How to Spot an ICO Scam

Initial Coin Offerings (ICO) is best understood as a type of fundraising within the world of cryptocurrency. Of course, as with any kind of fundraising effort, the intent is to attract investors. However, because cryptocurrency laws are evolving and it’s still considered a new form of investment, there are many questions surrounding what makes an ICO investment-worthy, and there are many ICO scams waiting to trap enthusiastic investors. We’ll go over a few red flags to watch out for below, but if you still have questions or concerns, we can connect you with an experienced cryptocurrency lawyer to assist the vetting process.

 

Guaranteed Return on Investment

This is a virtually impossible claim to make. Be wary of any ICO that promises a big return and little risk. The reality is that even if it may end up being profitable long-term, this is still a young, risky sector.

 

Be aware of unsolicited offers

Again, there is a lot of ICO fraud being perpetrated in the market. Unsolicited offers could be a potential sign of someone trying to take advantage. Unsolicited investment opportunities are rare and for many businesses, unheard of.

 

Ask about Licenses

Any seller should be able to produce a license. Make sure that agents are licensed and the firm is registered before moving forward; for example, states like New York require any persons or business controlling, issuing or administering a virtual currency to have a BitLicense.

 

Pay attention to requirements

If the seller is making a lot of promises without any requirements (such as no net worth or income requirements) or there is a quick deadline for investment, then chances are it’s not a secure situation.

Consult a Cryptocurrency Lawyer

Cryptocurrency law is always evolving. Your best option moving forward is to hire a seasoned cryptocurrency attorney that can help. LawTrades is happy to connect you with the best lawyer for your needs. You should also check out our subscription-based legal plans for ongoing legal assistance throughout the year. It’s easy to sign up and choose the timeframe that works for you. The perks include unlimited legal consultations, $0 service fee, plus significantly reduced hourly rates.

 

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