How to do due diligence on ICOs

How to do due diligence on ICOs

Much like cryptocurrencies themselves, ICOs are currently unregulated and decentralized (although processes are being studied and proposed), which means that there is currently no single authority that oversees the administration and fulfillment of these project. While this is convenient for many, it can also be a breeding ground for security threats and scams.

To prevent the possible occurrence of online scams and threats, many have suggested the possibility of regulating the development of ICOs. While several governments are taking steps to protect their citizens from ICO fraud, at the moment, the industry is largely self-policing. To that end, one tool potential investors can turn to is an upcoming ICO list, which can serve as a launch pad for their own research into the respectability of the product.

A more powerful tool in preventing investors from being scammed is the creation of several ICO review sites. Much like an ongoing and upcoming ICO list, these websites list the ICO projects currently running and planned for the future, however, they also come with ratings based on certain criteria. For instance, Cointelligence uses the following factors: data integrity, team identification, project vision, product, marketing, social engagement, and legal entity & company registration. All of which provides information, which helps investors create sound decisions without getting duped or losing profit.

While these measures are provided to help investors, financial security goes far beyond updated ICO list sites and rating sites. To ensure sound financial decisions, investors must take the time to practice due diligence when looking through different ICOs. Since creating a website, whitepaper, and generating tokens require minimal technical skills, many scammers are able to attract thousands, if not, millions of dollars worth of investments in return for a very small amount of work.

To avoid falling victim to such a scam, follow these tips on how to practice due diligence:

When it comes to investing in ICOs, it always helps to perform thorough research first. While it may be time-consuming, you can be grateful that upcoming ICO list sites, rating sites, and cryptocurrency news sites exist since they aim to help investors make financially sound decisions.

Author Bio:

On Yavin is the founder and CEO at Cointelligence, the data layer for the crypto economy. He has extensive experience as a serial entrepreneur and an angel investor, as well as more than 20 years of experience in the tech industry.  On uses his deep hands-on experience and knowledge of online marketing to create winning strategies for ICOs, crypto, and blockchain companies. Having earned the reputation of a crypto expert, On continues to contribute to this industry in ways that advance cryptocurrencies and blockchain technologies. On has a law degree (LLB) and is also a certified Advocate by the Israeli Bar Association.

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