The crypto-space that has brought us so many amazing projects has unfortunately brought a truck load of scam coins. Sometimes referred to as rugpulls, these coins should be avoided at all costs.
Luckily, many of these scams are so lazy the follow the same template and are easy to spot. Let’s explore the crypto scamcoin “Starter Pack”
#1 Anonymous Team
Most of the time, if a team is choosing not to reveal their identity, you have to ask yourself why.
Sure Satoshi chose to stay anonymous, but in our current climate, many of the best projects list their team's identities loud and proud for everyone to see.
Many times these scams will have an anonymous team, or a team using clearly fake identidies.
#2 Stolen Content
Most of these scams information is barely an inch deep. If you research past the surface level (usually the home page of the website) you will find either a lack of content or some serious copying and pasting.
You can check if content is stolen by Googling duplicate content checkers, much like your professor would use to check your essay.
#3 Bold claims. No details.
You'll hear it all.
The project will boast about how it will be the first to do this or that, yet they provide no details or roadmaps on how they plan to achieve it.
Additionally, any project that talks about how big your returns will be is in it for the wrong reasons and just attempting to capitalize on your thirst for profits.
#4 .Finance Domains
A trendy TLD these days in crypto is to have your domain end in .finance.
We aren't saying all projects that use the .Finance domain are scams, but lately it has taken on the reputation of the many scam projects that utilize it.
Add .Finance to your list of red flags when doing your own research.
#5 Overly Positive Community
If you enter the project's official forums or Telegram channel and it is filled with nothing but newly registered accounts shouting from the rooftops how awesome the project is, then run like hell.
Good projects generally have organic discussions of the positives, negative and potential pitfalls along the way. Any discussion devoid of objective discussion is a major red flag.
#6 Crazy Partnerships
Many of these "projects" will have logos of major corporations like Microsoft, Apple, Google anything they can find off the internet plastered on their site. Implying that they are somehow "partners" with these corporations.
In many cases this is just an outright lie, in the hopes nobody will check into their validity. In some cases, when pressed, the project will claim that they are working on a partnership in private and can't reveal the details until they are finalized (rolls eyes).
Either way, this is a bad sign. Run away!
Almost exclusively, these projects will let you "lucky early adopters" get in first on this amazing project.
They will open a pre-sale, that lets you get in and buy some coins at a discounted price. In reality, they project will either never launch or when it does, the price will race to the bottom.
#8 Vitalik Speaks Up
Ethereum creator Vitalik Buterin is aware of many of the bad actors that have utilized the Ethereum technology to do bad things.
I believe he is suggesting that there may be a need centralized auditing services to evaluate these projects. But in a decentralized space, pushing centralization has never been a popular opinion.
Crypto by its nature will always have bad actors, you take the good and the bad with this awesome "wild west" style tech. Stay on your guard and do heavy research before joining any project!