ICO is a fundraising mechanism where new projects sell their underlying crypto tokens in exchange for bitcoin and ether. As the companys value gets higher and becomes well established in the marketplace, the tokens value rises as well, which enables investors to gain more profits.
Unfortunately the crypto space has become riddled with scams and cons. Its difficult to tell sometimes which projects are true, from those that are only designed as money grabbers.
In order to differentiate the scam and con ICOs from those that are true, we need to look at the following; The team, 3rd party/independent escrow provider, is the website secure?, Community response, KYC/AML - Does the project implement or conduct any form of KYC (Know Your Customer) or AML (Anti Money Laundering) processes?