Initial Coin Offerings, or ICOs, quickly became a popular method for new blockchain projects to raise money from investors. In the early days, some ICOs brought impressive returns to those who invested early, making it seem like an easy way to make profits. However, many ICOs didn’t turn out well and ended with investors losing significant amounts of money.
Learning from past mistakes
One of the most famous ICO failures was Centra Tech. This project raised over $25 million in 2017 and got attention because celebrities like Floyd Mayweather and DJ Khaled promoted it. Centra Tech said it was offering a crypto debit card backed by Visa and Mastercard, but those claims were false. The founders were later charged with fraud, and the supposed partnerships never happened. Many investors lost everything.
Another big failure was Plexcoin, which promised a 1,354% profit in less than a month. The U.S. Securities and Exchange Commission called it a scam and took legal action. Most investors lost their money, and the case went on for years.
A huge fraud came from Pincoin and iFan, projects run by a company called Modern Tech in Vietnam. They raised about $660 million before the team disappeared, leaving thousands of investors with nothing. This is one of the biggest ICO scams on record.
These big failures hurt people’s trust in ICOs. They also made investors more careful. Even though the ICO market is better now, risky projects still appear. It’s important to learn how to spot these risks.
What to look for instead
Finding a good ICO can be tricky, especially since new ones are announced all the time. One useful resource to keep track of them is the ICO launch calendar. This calendar shows a list of upcoming ICOs in one place, making it easier to stay updated. It also provides important details like the project’s whitepaper, which explains the idea behind the ICO, information about the team running the project, and how they plan to use the tokens.
You can also see the project’s timeline, including key dates like the start and end of the sale. Having all this information organized helps you compare different ICOs more easily and learn more before making any investment decisions.
There are however still other important things to check before investing. First, look at the team behind the project. Real projects usually share information about their team members and their experience in blockchain or similar fields. If the team is anonymous or doesn’t have much relevant experience, that is a warning sign. Knowing who is behind the project builds trust.
The whitepaper is another important document. It should explain clearly what the project wants to do, how it works, and how the tokens will be used. If the whitepaper is full of unclear statements or marketing words without real details, it often means the project is not well thought out.
Understanding how tokens work is key. Look at how tokens are shared out, what they will be used for, and whether they have real value in the project. If most tokens are held by the team or sold privately before the ICO, there is a risk that these tokens will be sold quickly after the ICO, making the price drop.
Also, check the project’s community. Good projects usually have active communities on sites like Telegram, Discord, or Reddit. Developers who answer questions and listen to feedback show they want to build something reliable.
Be careful with projects that promise very high profits or quick gains. If an ICO guarantees big returns fast, it is probably a warning sign. Real projects focus on creating useful technology, not on promising quick money.
Choosing better projects
The ICO market today is more careful than it was during the hype years of 2017 and 2018. But it still takes work to pick the right projects. Past failures have taught investors to do their homework before putting money in.
There are still many honest projects trying to build useful blockchain products and services. Decentralised finance and other areas are growing steadily. But like any investment, success depends on knowledge and good judgement.
Using tools like the ICO helps investors keep track of new projects and compare their features closely. This way, you can find tokens linked to real products, not just empty promises. Look for projects with transparent teams, clear whitepapers, sensible goals, fair token distribution, and active communities. If any of these are missing or weak, it’s better to be cautious.
ICOs can still be a chance to get in early on promising projects. But patience and research are very important. Waiting for a well-prepared project is safer than rushing into one that might fail.
