Skip to main content

Overview of Signs of SCAM - Detailed Checklist

How to avoid facing fraudulent projects when investing in ICO? In this material we will make an overview of the signs of the three types of SCAM projects.

SCAM - can be divided into three types: fraudulent, inadequate and controlling.

A fraudulent scam is a criminal scheme when developers organize ICO with the task of stealing funds raised by ICO investors.


What are the signs of such scams?

  • The presence of unknown participants in the project;
  • Lack of experts from the industry where the project is planned to be built (gaming platform should be attended by experts of gaming industry);
  • There is no support for authoritative advisers;
  • No escrow agent or escrow scheme in the project;
  • An additional issue of tokens was declared or the threshold for issuing coins was not specified;
  • The lower and upper limit of funds for the creation and development of the project is not specified;
  • MVP is not provided;
  • The team does not support communication with users, does not attend thematic events, does not leave contacts for communication;
  • Making changes to the whitepaper after its publication;
  • Application of other people's media solutions, fake photos, copy-paste of other people's materials.


An inadequate scam is a situation where a development team is captivated by its fantasies about a project completely unrelated to reality.

  • No testing of the beta version of the product on the target audience, no MVP;
  • The rapid reaction of the team to the criticism of the project and inability, based on facts, to prove its validity;
  • Documentation of the project is written in a language that is difficult to understand;
  • There is no prototype or even a logical scheme of the product;
  • Declared a large number of solutions to market problems (speed and economy, and work with multiple platforms simultaneously);
  • Placing plagiarism in whitepaper from other sources;
  • Failure to take into account opinions of independent experts.


A controlling scam encourages an investor to make a choice, based on half-truth. To raise funds, a team manipulates the consciousness of users, linking the project with such eternal values ​​as gold, oil, gas.

  • Applying catchy metaphors for their results, for example, with words, semantically similar to “gold”; photo with Vitalik Buterin;
  • Statement that the project was not provided;
  • Formation of intricate schemes of rewards, referral programs, various MLM-schemes of promotion;
  • Using a variety of excellent forms in describing benefits of participating in the project, astronomical amounts of profit.


It is worth noting that types of SCAM projects can have mixed types of signs. And also it is possible that many teams, having familiarized themselves with this material, will try to disguise them.