what makes an ICO investment risky?

[cashbit]

The fake team members and fake project are the risks in ICO investment. But it can be minimized by doing a research before joining an ICOs. Sure, ICO coins need a time to improve the values. It commonly improves along with the development of the project.

[aiviaa485]

Because the ICO is raising funds by development.
If the #DevelopmentTeam  has greediness then the money can be taken and stolen by development.

I still remember the CENTRA project, this coin has been listed on the Exchange and a list on Coinmarkletcap but the end is a SCAM!

[arnishad]

From my purpose of read these days the foremost profitable are comes that antecedently had high costs, these days these comes are all-time low, like NEM or ADA, thus i believe that these days it's most advantageous to receive info and invest from these comes.

[icolumnist]

I like this article about the investments in ICO wriiten by BY  MORGAN E. WESTLING 

Investing in an ICO, or an initial coin offering, can provide both huge financial benefits and huge risks. Many people are intrigued by the growing digital currency industry that includes blockchain technology, because the potential is there to raise money very quickly. However, long term, the outcome can be grim, and many people end up losing the money they initially invested. There are many reasons why most ICOs fail. When investing in an ICO, people must exercise due diligence and make sure they know the risk they are taking. Here are some of the most common risks when investing in an ICO.

Regulatory

One big risk regarding ICOs is the fact that right now, every ICO is unregulated. However, in the future, this may not be the case. Everyone is currently investing in ICOs to make a quick buck, but they don’t realize that the quicker ICOs become popular, the more likely ICOs are to become regulated soon. If ICOs do become regulated, what will happen to the ICO tokens that have been previously purchased? Many ICOs may be sold or lose value. ICO regulation is a huge unknown and a huge risk for those looking to raise funds and keep them.

Business

Investing in an ICO is risky whether you choose an Ethereum ICO or a Bitcoin ICO. While smart contracts may be put in place to help you with your exchanges, there are no official licenses in place to solidify your investments. If you are contributing to or trying to start your own business, a developing team of many ICOs and ICO contributors may seem like a great way to raise money; however, long term, this may come back to bite you. The ICO price can drop quickly and you can lose everything your company was built on if you aren’t extremely careful.

Taxes

There are many tax risks and issues that can arise from investing in an ICO. ICO tokens can be classified as many different things when it comes to taxes. Some are classified as equity, some are property, some are debt, and some are prepaid goods/services. Every ICO must be treated differently depending on its tax classification. The risk that comes with this digital currency is making sure to report and withhold every ICO token correctly. Getting in trouble with the government over taxes is no joke in the real world. Many people may think they can get away with small slips in their taxes when using blockchain technology, but this is not a risk worth taking.

Cyber Attacks

Venture capitalists who invest in ICOs take a huge risk, because blockchain technology is a digital currency and can be easily susceptible to cyber attacks. Along with many other risks, cybercriminals are always looking for new ways to hack the system and steal cryptocurrency through the web. The most common way that cyber attacks happen in the real world is through phishing scams, in which individual’s identities are stolen.

Fraud

Along with cyber attacks, investing in an ICO has the risk for fraud. Identity theft is common with initial coin offering ICOs, because if a person’s identity is successfully stolen from outside the United States and their digital currency is taken, it is very unlikely that the authentic owner of the ICO tokens will be able to recover their funds. Unfortunately, once outside of United States jurisdiction, there is not much power over the situation. With the internet and digital space being so large, it allows fraud to happen internationally, and the risk becomes much more real.

Token Risks

When investing in an ICO, you can have ICO tokens. These tokens are based on smart contracts such as Ethereum. The risks of buying these ICO tokens is that they can be stolen, lost, and your online or offline wallet can be hacked just like real world money. Also, when buying ICO tokens, there is no guarantee that you will be able to sell these tokens later. The game of Ethereum ICOs and ICO tokens is a risk you must be willing to take. Make sure you know how to buy an ICO the right way if you do decide to buy the tokens.

BY  MORGAN E. WESTLING 

https://thechain.media/risks-of-investing-in-an-ico

[JaymondStark]

Some of the ICO projects ran away with the money they got from the ICO stage and left some cartoons at their website which says "aaaaand it's gone".