FBI Seeks to Educate Investors with Red Flags for ICO Fraud


ICO scams

The United State Federal Bureau of Investigation (FBI) has taken it upon itself to educate investors on ICO scams. The Bureau didn’t release an official statement, however, the news was shared in an interview with The Paypers this morning.

ICO Scams with the FBI

The investigator being questioned in the interview remains unknown at this time, but the answers are said to reflect the Bureau as a whole.

According to the FBI, there are several key things to look out for to tell if an ICO is a scam.

The first thing to look out for is an overarching trend of misrepresentation of a director or executive leader in the company’s professional experience.

Second, the Bureau has found that ICO scams often engineer a false impression of how much traction the startup has garnered in the industry. This is a practical marketing tactic for any fundraiser, but the FBI is asking investors to investigate these marketing claims.

>> Statis Finds that 80% of ICOs in 2017 were Scams

Lastly, the FBI wants investors to look out for the immediate unrealistic promises of prospective returns on tokens, including timelines and percentages.

“Like any investment product, rates of return can never be guaranteed and if it sounds too good to be true, it probably is,” the investigator told Paypers. Like any investment, the Bureau asks investors to do their due diligence and research before handing over money.

US Educating Investors

Last week, the Securities and Exchange Commission (SEC) released its own official guide to ICOs. In May of last year, the securities exchange even launched its own fake ICO to educate investors on ICO scams. The major US agencies are really stepping up their efforts to protect its investors from falling for fraud.

While US investors are blocked from entering many ICOs, individuals still us VPNs or Proxies to access these sites.

Featured Image: DepositPhotos © designer491

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