With the rise of cryptocurrencies, fraud has become common, especially in new projects or ICOs (Initial Coin Offerings). Verifying the legitimacy of the project protects you from losing your money and requires systematic steps that combine technical and financial research... Below is a comprehensive step-by-step guide based on reliable practices from sources such as Investopedia and Cointelegraph.
1. Read the whitepaper carefully
This official document is the "constitution" of the project. Check:
A clear description of the goal, technology, and the problem it solves (like improving payments or data storage).
No unrealistic promises like "guaranteed 1000% profit", as this is a sign of a scam.
How to access: Look for it on the project's official website or CoinMarketCap.
Halal advice: Ensure the project is not linked to illegal activities. Verify the team and transparency.
Look for team names on LinkedIn or GitHub. Do they have prior experience in blockchain or technology?
Legitimate projects reveal their identities (like Ethereum with Vitalik Buterin), while scams use pseudonyms.
Check partnerships: Are they collaborating with well-known companies like Binance or IBM?
Useful tool: Use Token Sniffer or GoPlus Labs to check smart contracts for security vulnerabilities.
3. Activity check and development
Go to GitHub: Are there regular updates and open-source code?
Check the Roadmap: Are there clear goals and realistic timelines?
Red flags: Lack of real development or copying from other projects.
4. Monitor the community and social presence
Check the official accounts on X (Twitter), Reddit, or Discord: Are they verified and active? Look for real interactions, not bots.
Read the discussions: Are there complaints about "rug pull" (where developers run away with the money)?
Tool: Use DappRadar to measure user and trading volume.
5. Analyze economics (Tokenomics) and the market
Check the Total Supply, token distribution, and liquidity on platforms like DexTools or Uniswap.
If the distribution is concentrated in the hands of a few (like 80% for developers), it's a high risk.
Check the price and trading on CoinGecko or CoinMarketCap: Is it listed on reputable exchanges like Binance?
Red flag: Promises of fixed returns or pressure to invest quickly.
6. Legal and security verification
Is the project registered with bodies like the SEC (in the United States) or compliant with regulations in your country? Check EDGAR for ICOs.
Check security audits from companies like Certik or PeckShield.
Tool: Crypto Scam Tracker from DFPI for detecting complaints.
7. Halal considerations (for Muslim investors)
Halal vs. haram: A currency is halal if it is free from riba (guaranteed returns), gharar (excessive ambiguity), or links to haram activities like gambling. Focus on real tech projects (like Bitcoin or Ethereum if supported by fatwas).
Additional steps:
Avoid unknown projects or those offering high "token burns", as they may be suspicious.
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investing-in-trading.com
Potential halal coins examples (2025): Bitcoin (as a commodity), Ethereum (for smart contracts), USDC (stable and interest-free).
General tips to avoid scams
Start small: Only invest what you can afford to lose.
Avoid pressure: Don't rush; scams rely on fear of "missing out".
Free tools: GoPlus Labs, DexScreener, RugDoc for token screening.
If in doubt: Stop and consult an expert. Remember, there is no "magic coin" – investing in crypto is risky.
By following these steps, you will significantly reduce risks.
