How to Ensure You Don't Get Scammed When Investing in ICOs

As many of you probably know, the Enigma Project got hacked yesterday and scammers managed to get people to send them over $300,000 worth of Eth/Bitcoin. I was on Enigma's mailing list to receive updates about their ico happening in September. I received the emails from the hackers with instructions on how to contribute to the project. I was just about to contribute when luckily I realized that it was a scam.

I felt relieved that I didn't contribute once I was able to confirm that it was a scam, but I also felt bad for all those people who lost their funds to the scammers. I wanted to write a short post with some key tips that helped me discern this scam in the hopes that this might help somebody else down the line if/when they ever encounter something like this, since it is common to encounter these types of scams in crypto land.

Tip 1:

Be suspicious of any emails you receive that contradict the instructions you originally received from the project you are planning to invest into. For example, with the Enigma Project, the pre-sale had already concluded and the public crowdsale had been scheduled for September, 2017. The email from the scammers claimed that they had decided to open up the pre-sale to the public to raise and additional 20 million dollars. It is possible of course for things to change and evolve and for teams to do something different than they initially intended. If that's the case though, it is unlikely that such a big decision would be made at the last minute with no advance warning. Be very suspicious if you receive an email of something like that.

Tip 2:

Be suspicious of emails that contain grammatical and/or spelling errors. This is what first tipped me off to the fact that this might be a scam. This was the exact wording of the email:

"We are pleased with the enormous support we have gotten in the last couple of weeks, The Enigma team has decided to open the Pre-Sale to the public. The hard cap for this pre sale will be 20 Million. Please note that tokens will be calculated and distributed based on how much the Pre-Sale raises."

If you look closely, you can see that there are a number of errors here such as inconsistent spacing between some of the words, a big error where it says '...weeks, The Enigma team....'. and also inconsistent capitalization and hyphenation of the term 'pre-sale'. These details can easily be missed if you're not careful but it pays to look at this stuff because it can save you a lot of money if you're able to discern a scammer and stay away because of it.

Tip 3

If you're ever in doubt and start to suspect that something might be a scam, turn to other channels to see if you can verify it or not. This is exactly what i did. I belong to Ian Balina's Telegram group, so once I thought that the email might be a scam, I decided to check in with that group, and sure enough, I saw people saying that it was a scam which was enough confirmation for me. It pays to have an outside group that you can check in on for things like this. Sometimes the hacker will be able to compromise various other communication channels of the project in question, so don't exclusively rely on those channels, although it's always a good idea to check those too in case one of them is not compromised and the team is able to get out warnings through them. I noticed that there were also good warnings about it here on steeemit, so this is another good place to check if you're wondering if something is a scam or not. The key point is that you have another outlet that you can rely on that is not directly connected to the project in question since you won't necessarily know how many of their channels are compromised while a hack/scam is taking place.

Tip 4

The tips above are the three basic things that helped me successfully avoid this scam that I may have otherwise fallen for. My hope is that this will help somebody else down the line avoid something similar in the future.

There are, of course, tons of different types of scams out there, including entire icos that are scams. The key way to avoid those types of scams, in my opinion, is to do diligent research about a project before you invest in it. In particular, make sure that you find out about the people on the project team and verify that they are in fact legit and that they are in fact connected to the project. It also helps if they at least have some sort of working prototype rather than just a whitepaper, because then you can be more confident that this is a legit project with people doing work to actually get this off of the ground.

Anyways, steem on but be careful out there!

-Jen