What are the red flags of a crypto scam?
Independent risk analysis on isthiscoinascam.com checks for the following red flags. Any one of these can be benign in isolation; multiple together significantly raise scam risk.
Honeypot
A token that lets you buy but blocks sells, trapping your funds. Detected by simulating a sell against the contract. Severity: critical.
Mintable contract
The contract owner can create unlimited new tokens, diluting existing holders. This is a major red flag unless minting is governance-controlled with a hard cap.
Anonymous team
No public identities means no accountability if things go wrong. Doxxed teams put their reputation on the line.
Concentrated holdings
A small number of wallets controlling the majority of supply means a few sellers can crash the price. Top-10 holders owning more than 50% is a warning sign.
No audits
Missing or unverifiable audits leave smart contract bugs and back-doors undetected. Audits from named firms (CertiK, OpenZeppelin, Trail of Bits, Quantstamp etc.) are stronger signal than self-claimed "audited" labels.
Hidden owner / proxy contracts
Contracts where ownership is hidden or upgradeable by an unknown party can be modified at any time — including to add fees, freeze transfers or mint tokens.
Excessive buy/sell tax
Tokens with very high transaction taxes (above ~10%) drain value with every trade. Modifiable taxes can be raised arbitrarily by the owner.
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