Last year, new cryptocurrency ICOs have trended. So many projects were launched. The bad, the good and the ugly. Many received high levels of funding while the crypto/ICO space reached its peak. This year, the industry is calmer and have spread out. So what are some of the important ICO Investor Questions to ask before investing in an ICO?
Before investing in a new cryptocurrency ICO, check the following items on the list:
- Who am I contracting with? Find out who is issuing the product and its sponsor. Check their backgrounds and the product description.
- Who’s marketing the product? Are they licensed for such responsibilities? Were they paid to promote it?
- Where’s the enterprise situated?
- Where is the money going? What will it be used for? Will it be used to pay others?
- What rights come with the investment?
- Can you verify the trading data?
- When, how and what will it cost to sell the investment. Can you return the token to the company and receive a refund? Can the token be resold and are there limitations to the power to resell?
- If the transaction involves a digital wallet, what happens if the key is lost? Can you still access your investment?
- If blockchain is used, will it be accessible to the public? Will you have unrestricted access to your investment?
- Does the offering comply with the law of securities and what implications will it have where there is non-compliance? Will it affect the value of the investment in the long run?
- What legal protection is available when there is a hack, fraud, downturn or malware in business prospects? Who is responsible for refunds of the investment is there is a problem.
- Do you have legal rights? Can you enforce them effectively? Will there be enough funds to compensate you if there are violations of that right?
This list is not extensive, be sure to research individually to understand what you’re getting into.