There are three types of scam-projects. Those types are initially fraudulent projects, torn-off-from-reality projects, and projects manipulating investors.
A fraudulent project is initially conceived as a scheme of gaining means from investors, without the creation of a product, and has the following features:
• unknown persons participate in the project;
• no experts from the sphere in which the product will be created (in a project connected with the finance there has to be a specialist from the area of expertise);
• no public, authoritative persons among the consultants of the project;
• no scheme of refunds in case of non-performance;
• the additional emission of coins is declared, or the limit of token emission is not specified;
• no bounds of the sum of funds for the project development;
• no point indicating the creation of a product prototype in the roadmap;
• the team avoids publicity, does not communicate with the community, does not attend thematic events;
• changes in the whitepaper after its official declaration.
A torn-off-from-reality scam represents the delusion of the team concerning the creation and the demand of the product. Any of the following features might be the sign:
• no prototype of a product or its testing in the market;
• inadequate reaction of the developers to recommendations about improvement of a product; the team cannot reasonably prove their position;
• whitepaper is written with specific vocabulary, or with an enormous number of technical terms, which are not clear to an investor;
• no clear concept of the project;
• the project solves a wide range of problems at the same time;
• declaration of the project uniqueness, and the absence of competitors;
• whitepaper copies or contains fragments from documentation on another projects;
• the team does not listen to independent experts.
A manipulating scam induces the investor to fund, using the psychological methods of pressure built on greed, fear to miss profit, eternal values, authority, etc. The projects of the kind use the following features in their ads:
• the overestimated profit;
• the product is tied to precious metals, oil and gas products, and other reliable assets;
• fake photos of famous people;
• false information about the connection of authoritative persons with the project;
• the statements that are not specified in the whitepaper and the roadmap of the project;
• the complex reward schemes, referral programs, different MLM schemes of promotion;
• a significant number of superlative adjectives;
It is worth noting that in most cases the projects show features of different types.
Lately the scammers try not to use patterns the experts caution about for promotion of their projects. That’s why it is important to pay attention to all the details possible, and at the slightest doubt, find another project to invest in.