![Crypto Scams.png](https://images.hive.blog/DQmejpyrYjEuz8cwCnkZBTyLscTW4f7KFDKBiPozp824TaF/Crypto%20Scams.png)

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So you want to invest in the crypto space, but you don't know where to start? It's easy to get overwhelmed by all of the hype, so let me help you out: just follow these tips for spotting fraud projects. 

I've been around this space since 2017, so trust me when I say that these are foolproof ways to ensure your hard-earned money isn't wasted on scammy Web3/Crypto projects with no future.

<h3> Team Members Who Are Fake Or Dubious Backgrounds </h3>

If you've ever had a LinkedIn account, this is the easiest way to spot fraud projects. If a project has a fake team member, they'll usually have an empty profile page because they don't want you to find out that they're not actually working on the project.

Check if their name is associated with other companies or projects. It's better to do a background check wherever possible.

If your gut tells you something's up about one of those team members and there aren't enough photos online for confirmation purposes (you know who I'm talking about), then ask yourself these questions:

- Is this person even alive? Do they have social media accounts? Is there any mention of them anywhere on the internet aside from being listed as part of this project?

<h3> Too Many Advisors </h3>

Too many advisors can also be a sign of fraud. Most of them do nothing but associate their name with a project. Chances are, some of those pictures and names are AI-generated and you won't even notice. 

What's more ridiculous? These fake advisors often have big-name titles and impressive-sounding biographies (examples include "VP at Google" or "Chief Data Officer at NASA"). Don't let the title fool you! 

In fact, most advisors' roles in the project are not formalized and they don't actually contribute much beyond lending their name to lend legitimacy to a project. While we were surprised that anyone would take on such an unimportant role without payment of some kind—we mean really, who wants their name associated with a scam? It turns out that scammers will do anything (even lie!) for one more sucker who'll give them money. 

<h3> Re-Using Other People's Work </h3>

Your first line of defense against fraud is to be on the lookout for copyright violations. If you see that a project has a white paper or website that looks like it was copied from another project, there is a high chance it is a scam. However, if you see the same exact website and white paper on multiple projects, it's almost guaranteed they are all scams.

This isn't always easy because most scammers work hard to make their websites look as legitimate as possible. They often hire professional designers to create slick-looking websites and then copy/paste them onto their new project's site without giving any credit back to the original designer(s). 

<h3> No Product or Demo </h3>

A demo is a working model of your product that helps investors understand how it works. It's like a movie trailer for your startup, and will ensure that you have the best chance at success once you go live with your product.

Once you've found a project with a demo, ask yourself these questions:

- Does it make sense?

- Is it easy to use?

- Does it look as good as they say it does? If not, why not? 

If so, then congratulations! This project has passed the "does this make sense?" test. You can cross off one more thing that could be wrong before investing in them.

<h3> Fake Collabs With Paid Influencers </h3>

If you’re in the habit of spotting fake partnerships, you may have noticed something strange. The projects that are most likely to be fraudulent are also the most likely to claim partnerships with well-known influencers on YouTube and Instagram. 

This is because paid influencers are often unreliable — they don’t always disclose their affiliations when they promote an ICO or digital asset to their followers, which means it can be difficult for investors to know if the partnership is real or not. 

For example, a paid influencer might promote a token without revealing that they were paid by its creators in exchange for promoting it. In this case, would they really want what's best for their audience? Or do they have other motivations?

<h3> Controlling Token Supply</h3>

**Tokenomics:** The most obvious red flag is if a token's price doesn't seem to have any correlation with its circulating supply. For example, if you've got a project where the circulating supply is set at 200 million but the total tokens issued is 1 billion, that's not looking good for your project. Why? Because it means there's something fishy going on with their token distribution and circulation process. It might be as simple as a large portion of tokens being kept off-market while they're "locked up" in some kind of vesting or lockup period (more on this later), but it could also be something more sinister like an actual fraud scheme where only pre-mined tokens exist.

**Token Distribution:** Another way to spot potential issues is by looking at how many addresses actually hold each particular cryptocurrency. Or rather which addresses hold most of them? This can tell you how evenly distributed or concentrated your currency actually is. Since centralized control often means corruption and manipulation of price action by those who have access to insider information about upcoming events such as major partnerships or developments coming down the pipeline. These might cause investors panic sell because they don't know what else could happen next.

<h3> Closed Source Software</h3>

Crypto is all about transparency. If a project doesn’t have open-source code, that doesn’t necessarily mean it is a fraud. However, it is a red flag and you should take this into consideration when doing your due diligence on ICO projects.

Most ICOs are built on open-source platforms such as GitHub and GitLab, so they should be able to provide their code there. If they cannot do so or do not have any public repositories at all, this may be a sign of laziness or lack of skill among developers who work for them (or both). 

This does not necessarily mean that these projects are scams but if you have found something suspicious about an ICO then it can be used as evidence against them in court later on down the line if needed (for example, in case of disputes over tokens).

<h3> Invest In Projects You Truly Believe And DYOR </h3> 

Nobody can stop you from investing in a project you truly believe in. But the best way to avoid getting scammed is by doing your own research and not being afraid to ask questions.

If someone is trying to sell you something, don't let their urgency convince you that this is the best investment opportunity ever. Be wary of people who are too eager to sell you something! Ask yourself: "Do I really need this?" and "Do I understand what it does?" If your answers are no, walk away and find a different project that could better suit your needs (or just buy some bitcoin).

<h3> Conclusion </h3> 

I hope this article has helped you spot some red flags in cryptocurrency projects. Remember that the best investments are those that you understand and believe in yourself, so do your research and only invest in projects where you can clearly see their potential!

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<center><sub>Not financial advice. For infotainment purposes only.</sub></center>

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