Top 3 Tips to Identify Cryptocurrency Scams
Cryptocurrency scams are everywhere. Investors have poured $1 billion into 271 digital coin projects that bore red flags such as plagiarized documents or fake executive information, according to the Wall Street Journal. So how can individual investors avoid such scams? Here are three top tips:
1. Check the domain name registration data of crypto projects
A website domain name is helpful in identifying many other useful information such as the registrant and its registration date. If a cryptocurrency project tries to make a quick buck and acts as a potential scam, it will start to lure investors’ attention not long after the domain registered.
So let’s do a WHOIS search!
You can search the project’s domain name on whois , an internet domain directory, and get the information about its registrar name, registration contact and registration date.
For example,a Chinese cryptocurrency project called MXCC has a pompous domain name —- superstarchain.org, and a WHOIS search shows that it bought the domain name three days before their marketing campaign, signaling that it is a potential scam. Not surprisingly, MXCC team disappeared after raising 5 billion yuan through ICO in January. And it became the first blockchain project to go to zero.
In addition, we should keep an eye on the content and design of the project’s official website.
2. Make sure team members are not “fake”
Many air coin projects in China will post some foreigners’ images which they download from image galleries at will on its website to prove that it is an international effort.
In order to confirm the true identity of a dubious crypto project’s team members, you can resort to many tools like Chrome browser and LinkedIn. First, you can put an image on Google search, and click the button on the right side, “search by image”, to verify his or her profile.Second, you can try to search them on LinkedIn to see if there are any fabricated working experience of the person.
3. Tracking GitHub activity of crypto projects
Github activity — the frequency with which the code governing cryptocurrencies is updated – is an important indicator when analyzing ICOs and crypto projects. If a project has many developers dedicating their time and skills to upgrade codes, it means there is less probability the project is just a scam.
You need to check the project’s contributors first on Github to see whether it has a lot of developers to upgrade codes regularly and often. Then You can check whether the latest improvement proposal in the “Issues” section are meaningful.