1. **Promises of unrealistic profits**: If a project promises huge financial returns in a very short period of time, this is often a sign of fraud. There are no investments with guaranteed high returns and without risks.
2. **Lack of transparency**: If the project does not provide clear information about the founding team or does not have a reliable whitepaper that explains the technical and economic details of the project, this may be an indication of the project’s lack of integrity.
3. **Excessive Marketing**: Projects that rely heavily on aggressive marketing rather than focusing on developing an actual product are often suspect. Pushing for promotion without an actual product can be a sign of a pyramid scheme.
4. **Pump and Dump Projects**: These projects rely on inflating the price of the digital currency through rumors or advertising campaigns, then the project managers sell large quantities of the currency, which leads to the price collapsing and investors losing.
5. **Lack of real product or technology**: If the project is based solely on future promises without a working technology or testable product, there is a high probability that the project is fraudulent.
Examples of this include:
- **Squid Game Token**: It was launched in October 2021 after the huge success of the series "Squid Game". The project seemed to be related to the series, which prompted many to invest in it, but it turned out to be a scam as the developers withdrew the funds (Rug Pull) and fled after the price rose, resulting in huge losses for investors.
