1. Unrealistic claims
Be careful of any offer that makes lofty claims without providing evidence to back them up.
2. Lack of listing on main exchanges
If you want to invest in crypto, examine if it's available on big exchanges like Coinbase or Gemini. If it isn't, you should think again.
3. Lack of detail in ICO paper
If an initial coin offering (ICO) document is lacking in specifics, it may be best to avoid investing.
4. Lack of an ICO paper altogether
An ICO without a whitepaper is sometimes indicative of a poorly thought-out idea, an inexperienced team, or fraud.
5. Pump-and-dump behavior
When the price rises and draws new investors, the original owners sell out, leaving new investors with much lower-valued crypto.
6. There's a dubious celebrity endorsement.
Floyd Mayweather and DJ Khaled were reportedly paid to promote a cryptocurrency fraud named Centra Tech in 2017. So do your research.
7. The community is small and inactive
A tiny and inactive community may reflect a lack of interest or belief in the project, ultimately contributing to its demise.
8. There is little to no information available about the original team or firm.
The website of a project should provide information about the team behind it.
9. Team members that are disorganized or unskilled
Look for internet reviews and testimonials from other investors to help you with your research.
10. The code is not open-source
Anyone can see, download, and modify the code of an open-source project. This transparency is critical for ensuring the project's credibility.