The crypto world is full of opportunities, but unfortunately also full of scams. Every year, thousands of people lose money investing in projects that turn out to be temporary “pump and dump” schemes, Ponzi schemes, or completely fictitious tokens with no real value.
The good news: there are several signs that can help identify scam projects early.
1. Team and Developers
The first thing to check – who is behind the project.
Real people or anonymous profiles?
If the team is anonymous and you cannot find their experience in other projects → huge risk.
Check LinkedIn / Twitter / GitHub activity.
Are the team members actually working on the project, or just using “stock photo” images?
Advisors: if famous names are mentioned, verify they are truly involved, not just used for marketing purposes.
Red flag: “CEO” with zero blockchain experience, fake profiles, or no one taking responsibility.
2. Whitepaper and Documentation
Every serious project should have a whitepaper explaining:
Project goals and the problem it solves
Technical solutions
Tokenomics (how many tokens, distribution, inflation/deflation)
Use cases
Red flag:
Whitepaper full of buzzwords without technical logic
Copied or poorly written documents
No explanation of why the project is needed at all
3. Tokenomics
Another important aspect – token economics.
How are tokens distributed among the team, investors, and community?
Does the team hold a huge share (>40%) → risk of dumping and price crash
Is there a vesting period?
What is the token’s real utility?
Red flag: If a token has no utility (just “buy because the price will rise”), it almost always ends in a scam.
4. Smart Contract Audits
If the project operates on Ethereum, BNB Chain, or other blockchains, the token should have a public smart contract.
Is the code audited (e.g., CertiK, Hacken, SlowMist)?
Are there any backdoors (hidden functions that allow the team to freeze or steal funds)?
Red flag: No audit, or proxy-type code where the owner can change rules at any time.
5. Liquidity and Exchanges
Can the token only be traded on one obscure DEX?
Is there sufficient liquidity (to buy/sell without huge fees)?
Is the project listed on reputable exchanges (Binance, Coinbase, Kraken, Bybit, etc.)?
Red flag:
Locked liquidity not publicly verifiable
Promises of “Binance listing soon” without proof
6. Community and Activity
Check the project’s Telegram, Discord, Twitter
Real people or just bots?
Discussions about technology or just “When moon?” and “100x soon”?
Does the team answer questions?
Red flag: Community is hype-only with no real information – a sign of a Ponzi scheme.
7. Promises and Marketing
Scammers often use excessive marketing:
“Guaranteed 100x profits!”
“Risk-free investment!”
“Exclusive opportunity, only now!”
Tip: If a project promises unrealistic returns without risk → it’s a scam.
8. Regulation and Legal Status
Is the project registered as a company?
Is there legal information about where it operates?
Is the project verifiable (e.g., via CoinGecko / CoinMarketCap)?
Red flag: Anonymous founders, no legal address, no official documents.
Practical Checklist: How to Quickly Verify a Project
Check the team and LinkedIn profiles
Read the whitepaper – does it make sense?
Examine tokenomics – is it unbalanced?
Verify if the smart contract is audited
Check where the token is traded and if liquidity exists
Evaluate community quality
Be skeptical of exaggerated promises
Check if the project is registered and verifiable
Conclusion
A crypto project is not automatically safe just because it has a beautiful website or social media hype.
The safest investments are projects with:
Transparent team
Clear business model
Audited code
Real utility
If something seems too good to be true – most often it is a scam.