How to spot a shitty ICO – illustrated with UTRUST
Whole countries ban ICOs. No, not only China – even the crypto-friendly Switzerlandwarns ICO market is full of scams. Pump and dump tokens appear every week, gather several dozens of “great project!” fanboys on Reddit and die out.
There are rare exceptions, especially now that startupers have been getting cautious considering public disdain for ICOs. Example – The Colony deciding to put off their ICO before the product is ready. They feel the Zeitgeist right – the public is tired of ICOs.
So how do you spot a genuinely shitty ICO?
I’ve just received a promotional email from CryptoCompare, promoting the UTRUST ICO and it contains all the features of a shitty ICO pump. Ironically, CryptoCompare published a “how to avoid scam ICOs” guide recently. Well, time to illustrate the guide with an ICO they are promoting.
So let’s go, the main features of a shitty ICO are:
Absence of product.
This is the roadmap on UTRUST website:
There is no product. The Minimum (!) Viable Product will appear 3 months after you give them your money. They are raising capital for a product that is not ready yet. Most ICOs that do that are utter scams. Take an IPO and replace “product” with “coin” – you got your ICO, company shares sold before company showed even a prototype.
No product = no need to invest.
2. Daydreams about token price
Utrust is worried about their token price, describing how good the price growth will be:
This is a huge red flag. These people talk how their token supply will decrease (basic cryptocurrency feature present in all coins) and the token price will grow. See how fat that rising bottom line is. This is all they want – an expensive token that will let them dump and exchange it for Bitcoin.
3. Mistakes in website copy and e-mail
Seriously, with a supposedly brilliant team of almost 30 people you’d think they can proofread their copy:
UTURST… YouFirst or YouThirst?
“The purpose is to raise … to establish … and becoming lead Fintech startups”. That’s rich. Also, read what is says – the purpose of the ICO is for them to become a “lead fintech startup”. They are not here to solve customer’s needs – but just to add a fat line to 30 CVs. That’s a noble purpose! We’ll get back to the actual essence of what they write after one more point.
4. Aimed at newbies:
If the first and the most important question they need to answer is “what is an ICO” – that means they target mommy bloggers and retired investor wannabes, all of which will suffer due to lack of crypto experience.
A token for a crypto/fiat payment system is a techie thing right now. The fact that they aim it at newcomers means they are probably buying tons of ads for people who can’t sense their bullshit.
Now, those were just the obvious red flags we got glancing at their site.
Let’s read what they actually say.
- Promo e-mail
> UTRUST is the first cryptocurrency payment solution in the world that provides buyers with a purchase protection mechanism. The next-gen version of PayPal is blockchain-based and designed
Wait, what? People made cryptocurrencies to avoid companies like PayPal (freezing funds, always siding with buyer, zero reliability or transparency, fees) – and now you tell us you want to be PayPal? That’s rich!
> bring trust to day-to-day consumer crypto-transactions and become one of the catalysts to drive forward the mass adoption of blockchain technology.
> Their innovative platform intends to transfigure the existing cryptcurrency landscape by offering more efficient and reliable crypto-to-fiat payments that will combine the speed and security of blockchain technology with the protection, safety, and credibility of the more traditional payments systems.
So, bring trust to Crypto by using fiat? Cool.
> The platform main value proposition resides in a unique built-in payment protection mechanism which aims to bring more trust and transparency to crypto-currency payments
Bring more transparency into the world of public ledgers where every transaction is traceable and even hacked crypto movements are watched… OK, you can try.
> UTRUST will be one of the first KYC/AML compliant token.
How is this a good thing? The majority of crypto users wouldn’t touch any “know your customer” “anti money laundering” products with a shit stick, because they value anonymity and despise state control.
> We believe that digital tokens are more than an asset for financial speculation.
First sentence on their site, they rush to say tokens are normally used for financial speculation, but UTRUST is different. The fact that they talk about their token, not their product all the time, tells us the opposite.
> Your payment of Ethereum or Bitcoin for purchasing of UTK will be non-refundable. … You shall give full considerations to all risk factors, including but not limited to the volatility of cryptocurrency prices, risks of systemic failure, risks of code failure, bugs, and other unforeseeable events. Make sure that you understand the risks in participating in such a “Crowdsale”.
We don’t even want to go on with the terms, this is just the first page. They can sell the tokens, dump half of the proceeds and then say there was a code failure. UTRUST is the perfect ICO to not trust, but rather stay away from.
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