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An ICO is necessary for raising funds by selling tokens. These are digital assets based on blockchain technology. They are used both as the project's internal currency and for trading on crypto exchanges. An ICO is characterized by having a document that discloses the project's goals, its financial model, and the creators with their team.
There are main stages of ICO operation:
- project preparation - all goals, ideas of the cryptocurrency's work process, and their implementation process are described;
- marketing campaign – allows promoting the project through social networks and advertising;
- ICO launch - the sale of cryptocurrency begins with attracting investors, this stage is considered the main one;
- project implementation - through the funds collected during the launch, investments are directed towards further project development, the main resource of testing is launched, and technology development is conducted;
- project evaluation - a thorough study of the creators by investors takes place, their real goals, partnerships, the value of the collected cryptocurrency, and its role in crypto exchanges.
ICO Fraud
As ICO projects gain popularity, they attract the attention of fraudsters who also create projects but with fraudulent intentions. The main goal is to attract investors to collect money and work with fake currency or newly created tokens. By the principle of ICO, fraudsters create hype around a new currency, providing false information about the project's operation, its mechanisms, and implementation.
To avoid falling into a fraudulent project, it is necessary to remember some rules for identifying fake projects:
- team verification, it is necessary to ensure that the creators have valid profiles and possess work experience;
- read the White Paper document, it should contain specific descriptions and actions, if it is filled with general phrases, then it is a fake;
- study forums, social networks, reviews, discussions on various investment platforms;
- check token distribution;
- check the project for reliability and the presence of a prototype as a working solution.
The main thing is to be attentive when studying this topic and to understand when a project is real and when a fraudster has set traps for deception.
Fake Investments
The most common way to carry out fake investment projects is by creating investment platforms that are clones of real financial companies. Such fake investment platforms are implemented by scammers using websites and applications of well-known companies, where they post information with promises of high and unrealistic returns.
Scammers contact the victim and offer to open and activate an investment account, to further convince the victim to invest, they provide false screenshots showing high returns and available withdrawal methods. In this way, scammers gain the victim's trust, causing them to invest more and more money.
Scam Projects
Fraudsters are becoming more sophisticated in creating new scam projects, one of which is providing assistance in recovering lost assets for victims. In this situation, they target those who have already had dealings with them and were deceived. Scammers pose as employees of either a legal firm or government organizational bodies, with a promise to assist in returning funds that were stolen during fraud. They explain that this procedure is costly and requires an advance or partial payment, resulting in victims losing even more funds.
Among scam projects, fraudsters also use a method involving remote access for consultations with the installation of special software. Posing as investment experts or project employees, they propose installing additional analytical software to gain remote access to the program. Thus, fraudsters gain access to the victim's personal data and accounts, allowing them either to steal the funds there or to take out a loan in the victim's name.
Crypto Investments
Crypto investment is the investment of assets in digital currency to generate profits and income. Due to the high volatility of the cryptocurrency market, this method of investment has become quite popular.
Profitability in crypto investments is possible. However, one should not exclude the risks that await cryptocurrency owners.
It is not recommended to start working with cryptocurrency on platforms without first studying the topic and understanding the process of buying and selling crypto money. The best way to work with crypto investments is in the long term, even if prices fluctuate, there is still a trend of constant growth for established cryptocurrencies.
Investing in cryptocurrency can be profitable for most investors, so it is necessary to have knowledge, be able to analyze, plan, and calculate various situations with virtual money to achieve the desired result in the long term.