Crypto Consulting: What CEOs Need to Know Before Hiring
Crypto Consulting: What CEOs Need to Know Before Hiring
April 22, 2024 | Crypto / Wallet
3 min read 
Nael Shahbaz
Table of Contents
Cryptocurrency is booming (depending when you’re reading this). But it's not always rainbows and sunshine—the road is treacherous. Yet, amidst the risks lie incredible opportunities. Crypto Consulting offers expert guidance for newcomers and seasoned businesses alike. But how do you find the right consultant?
This post looks at the different scams prevalent in crypto and digital assets. And then gives you a list of red flags that you should be on the lookout for when finding your cryptocurrency consultant.They can help you choose suitable investments, manage risks effectively, and stay ahead of the game. I’ve mentioned bonus tips at the end that only pros know in vetting consultants.
To give you a glimpse of the types of horrors that exist in the blockchain world, we need to look at the type of scams that exist.
Crypto Consulting Services: Scams and Opportunities
The Pig Butchering Scam
These elaborate schemes use social engineering tactics, often through dating apps, to build trust. Victims are enticed with promises of high returns, only to lose everything they've "invested."
Fake Celebrity Endorsements
Celebrities are increasingly targeted for deepfakes or manipulated clips to promote dubious crypto schemes. The goal is to lend false credibility.
Rug Pulls
A 2021 Chainalysis report exposed this as a major problem. Developers hype a new token only to abandon the project, suddenly stealing all investor funds.
These are just a few examples. Crypto scams cost individuals billions annually and damage the entire industry's reputation. This brings us to why crypto business consultants have become essential in guiding businesses and CEOs.
InvoBlox offers expert crypto consulting services, guiding CEOs towards informed investment decisions and a strategic edge within the blockchain landscape. Click Here for 30-min FREE consultation.
6 Red Flags You Need to be Aware of While Finding Crypto Consultants
Guaranteed Outsized Returns
The BitConnect scandal was an infamous Ponzi scheme that promised investors returns of around 1% per day, which was unsustainable and a crystal-clear red flag. The promise of guaranteed, easy profits lured many victims.
The cryptocurrency market is inherently speculative. While some projects may experience rapid growth, there's always the risk of equally rapid decline. Any consultant who guarantees profits or downplays volatility is either profoundly misinformed or a fraud.
Pressure Tactics
Fake ICO (Initial Coin Offering) promotions in 2017/2018 used high-pressure sales tactics. They'd claim limited-time bonuses or falsely imply an impending sell-out of tokens to rush investors into buying.
Legitimate consultants understand that investing, especially in cryptocurrency, requires thoughtful consideration. Pressuring someone suggests that the "opportunity" can't withstand scrutiny. It's a tactic designed to bypass critical thinking.
Mystery Background
Many self-proclaimed "crypto gurus" on social media offer consulting services but reveal little about their real track record. They might use vague claims without any verifiable proof of past success.
Reputable consultants are transparent about their experience. Look for case studies, testimonials from reputable sources, or a history of working with known projects/companies. Lack of details makes it impossible to assess their competence.
Shilling Specific Coins
During the meme coin frenzy of 2021, countless influencers relentlessly promoted coins like Dogecoin and Shiba Inu, driving up prices based on hype. Some may have been paid promoters rather than offering genuine analysis.
A good consultant focuses on developing overall investment strategies and risk management. Obsessively pushing a single coin suggests either the consultant needs help understanding diversification or, worse, has a personal stake in that coin's success.
Unrealistic Claims of Technical Expertise
In 2018, a project called "Quantum Resistant Ledger" (QRL) promised to be unhackable due to its supposed use of groundbreaking quantum computing technology. However, experts quickly dispelled these claims, and the project's value flatlined. Some consultants might exploit a lack of technical knowledge by making fantastical claims about a project's capabilities.
Be bold and ask questions about the technical aspects of a project a consultant recommends. It raises a red flag if they can't explain things in simple terms or resort to overly complex jargon. A good consultant should be able to bridge the gap between technical details and understandable investment analysis.
Unregistered or Unlicensed Consultants
Generally, the Securities and Exchange Commission (SEC) requires certain investment advisors to register in the US. Particularly, for most cryptocurrency services, an MTL (money transfer license) is required in 49 of the 50 states. Operating without proper registration is a major red flag, as it suggests the consultant may not be subject to regulatory oversight or may have a history of misconduct.
Research your local regulations regarding cryptocurrency consultants. Look for credentials, licenses, or registrations that verify their legitimacy. Professional associations in the crypto space might also have membership requirements that indicate a consultant adheres to a certain ethical code.
Benefits of Crypto Consulting: Why Consider a Professional?
The fast-paced, complex world of cryptocurrency requires knowledge, skill and professional strategy. While independent learning is possible, a qualified crypto consultant offers distinct advantages:
Risk Mitigation: They help identify red flags in projects, safeguarding your investments from potential scams or ill-advised choices.
Informed Decisions: Consultants understand the technical nuances of blockchain, deciphering hyped projects from solid opportunities.
Time Savings: Extensive market research is time-consuming. A consultant acts as your dedicated researcher, freeing your time for other priorities.
Network Access: Reputable consultants often have connections to promising projects, early-stage opportunities, and reliable industry partners.
We’re almost at the end of the post. So far we have discussed great insights that will help you in finding the right consultants, no matter if you’re the CEO or one man army trying to launch your coin.
As promised, here are some bonus tips so that you won’t make the mistakes that others make inf findin the right blockchain consultant.
Bonus Tips
-
Initial skepticism is a healthy starting point in the crypto world. Outlandish promises of "doubling your investment overnight" or "guaranteed profits" are telltale signs of trouble.
-
Perform an effective search, e.g., ["consultant's name" + "scam" OR "review" OR "complaint"]. However, finding negative reviews or allegations of fraudulent activity doesn't automatically write someone off; it warrants further investigation and caution.
-
Look for more than just positive reviews online. Are there examples of the consultant correctly identifying market dips, steering a client away from a failing project, or implementing a successful risk-mitigation strategy?
-
It might seem overkill, but contact the people providing testimonials to confirm the experience if possible.
-
Educate yourself about the types of fee structures consultants use (hourly, retainer, percentage of profits). You must know this upfront. Hidden fees or a refusal to disclose them are unacceptable.
-
Beware of consultants who discourage independent research or are annoyed by questions. A good consultant is invested in empowering their clients.
-
Check professional networking sites (LinkedIn) and company registration records (if applicable), and search for past conference presentations or publications.
-
Typos and errors on their website, inconsistent social media profiles, or a lack of online history can indicate they are not well-established.
-
Ask them tough questions like, 'How do you identify potential red flags in a crypto project?" OR "Can you describe a time you advised a client AGAINST an investment?" OR "What is your process for communicating market changes with clients?"
The trust barrier in crypto consulting is a serious problem, but it's not insurmountable. It takes effort to separate the trustworthy from the scammers. By staying informed, asking the right questions, and refusing to be pressured, you vastly improve your odds of finding guidance that propels you forward, rather than setting you back.
Remember, a more trustworthy industry benefits everyone. Do your part, and the potential rewards of the crypto space become much more attainable.
InvoBlox delivers results-driven crypto consulting. CEOs trust our expertise to build profitable crypto portfolios and make strategic decisions aligned with their company's vision. Click Here for 30-min FREE consultation.
Table of Contents
Cryptocurrency is booming (depending when you’re reading this). But it's not always rainbows and sunshine—the road is treacherous. Yet, amidst the risks lie incredible opportunities. Crypto Consulting offers expert guidance for newcomers and seasoned businesses alike. But how do you find the right consultant?
This post looks at the different scams prevalent in crypto and digital assets. And then gives you a list of red flags that you should be on the lookout for when finding your cryptocurrency consultant.They can help you choose suitable investments, manage risks effectively, and stay ahead of the game. I’ve mentioned bonus tips at the end that only pros know in vetting consultants.
To give you a glimpse of the types of horrors that exist in the blockchain world, we need to look at the type of scams that exist.
Crypto Consulting Services: Scams and Opportunities
The Pig Butchering Scam
These elaborate schemes use social engineering tactics, often through dating apps, to build trust. Victims are enticed with promises of high returns, only to lose everything they've "invested."
Fake Celebrity Endorsements
Celebrities are increasingly targeted for deepfakes or manipulated clips to promote dubious crypto schemes. The goal is to lend false credibility.
Rug Pulls
A 2021 Chainalysis report exposed this as a major problem. Developers hype a new token only to abandon the project, suddenly stealing all investor funds.
These are just a few examples. Crypto scams cost individuals billions annually and damage the entire industry's reputation. This brings us to why crypto business consultants have become essential in guiding businesses and CEOs.
InvoBlox offers expert crypto consulting services, guiding CEOs towards informed investment decisions and a strategic edge within the blockchain landscape. Click Here for 30-min FREE consultation.
6 Red Flags You Need to be Aware of While Finding Crypto Consultants
Guaranteed Outsized Returns
The BitConnect scandal was an infamous Ponzi scheme that promised investors returns of around 1% per day, which was unsustainable and a crystal-clear red flag. The promise of guaranteed, easy profits lured many victims.
The cryptocurrency market is inherently speculative. While some projects may experience rapid growth, there's always the risk of equally rapid decline. Any consultant who guarantees profits or downplays volatility is either profoundly misinformed or a fraud.
Pressure Tactics
Fake ICO (Initial Coin Offering) promotions in 2017/2018 used high-pressure sales tactics. They'd claim limited-time bonuses or falsely imply an impending sell-out of tokens to rush investors into buying.
Legitimate consultants understand that investing, especially in cryptocurrency, requires thoughtful consideration. Pressuring someone suggests that the "opportunity" can't withstand scrutiny. It's a tactic designed to bypass critical thinking.
Mystery Background
Many self-proclaimed "crypto gurus" on social media offer consulting services but reveal little about their real track record. They might use vague claims without any verifiable proof of past success.
Reputable consultants are transparent about their experience. Look for case studies, testimonials from reputable sources, or a history of working with known projects/companies. Lack of details makes it impossible to assess their competence.
Shilling Specific Coins
During the meme coin frenzy of 2021, countless influencers relentlessly promoted coins like Dogecoin and Shiba Inu, driving up prices based on hype. Some may have been paid promoters rather than offering genuine analysis.
A good consultant focuses on developing overall investment strategies and risk management. Obsessively pushing a single coin suggests either the consultant needs help understanding diversification or, worse, has a personal stake in that coin's success.
Unrealistic Claims of Technical Expertise
In 2018, a project called "Quantum Resistant Ledger" (QRL) promised to be unhackable due to its supposed use of groundbreaking quantum computing technology. However, experts quickly dispelled these claims, and the project's value flatlined. Some consultants might exploit a lack of technical knowledge by making fantastical claims about a project's capabilities.
Be bold and ask questions about the technical aspects of a project a consultant recommends. It raises a red flag if they can't explain things in simple terms or resort to overly complex jargon. A good consultant should be able to bridge the gap between technical details and understandable investment analysis.
Unregistered or Unlicensed Consultants
Generally, the Securities and Exchange Commission (SEC) requires certain investment advisors to register in the US. Particularly, for most cryptocurrency services, an MTL (money transfer license) is required in 49 of the 50 states. Operating without proper registration is a major red flag, as it suggests the consultant may not be subject to regulatory oversight or may have a history of misconduct.
Research your local regulations regarding cryptocurrency consultants. Look for credentials, licenses, or registrations that verify their legitimacy. Professional associations in the crypto space might also have membership requirements that indicate a consultant adheres to a certain ethical code.
Benefits of Crypto Consulting: Why Consider a Professional?
The fast-paced, complex world of cryptocurrency requires knowledge, skill and professional strategy. While independent learning is possible, a qualified crypto consultant offers distinct advantages:
Risk Mitigation: They help identify red flags in projects, safeguarding your investments from potential scams or ill-advised choices.
Informed Decisions: Consultants understand the technical nuances of blockchain, deciphering hyped projects from solid opportunities.
Time Savings: Extensive market research is time-consuming. A consultant acts as your dedicated researcher, freeing your time for other priorities.
Network Access: Reputable consultants often have connections to promising projects, early-stage opportunities, and reliable industry partners.
We’re almost at the end of the post. So far we have discussed great insights that will help you in finding the right consultants, no matter if you’re the CEO or one man army trying to launch your coin.
As promised, here are some bonus tips so that you won’t make the mistakes that others make inf findin the right blockchain consultant.
Bonus Tips
-
Initial skepticism is a healthy starting point in the crypto world. Outlandish promises of "doubling your investment overnight" or "guaranteed profits" are telltale signs of trouble.
-
Perform an effective search, e.g., ["consultant's name" + "scam" OR "review" OR "complaint"]. However, finding negative reviews or allegations of fraudulent activity doesn't automatically write someone off; it warrants further investigation and caution.
-
Look for more than just positive reviews online. Are there examples of the consultant correctly identifying market dips, steering a client away from a failing project, or implementing a successful risk-mitigation strategy?
-
It might seem overkill, but contact the people providing testimonials to confirm the experience if possible.
-
Educate yourself about the types of fee structures consultants use (hourly, retainer, percentage of profits). You must know this upfront. Hidden fees or a refusal to disclose them are unacceptable.
-
Beware of consultants who discourage independent research or are annoyed by questions. A good consultant is invested in empowering their clients.
-
Check professional networking sites (LinkedIn) and company registration records (if applicable), and search for past conference presentations or publications.
-
Typos and errors on their website, inconsistent social media profiles, or a lack of online history can indicate they are not well-established.
-
Ask them tough questions like, 'How do you identify potential red flags in a crypto project?" OR "Can you describe a time you advised a client AGAINST an investment?" OR "What is your process for communicating market changes with clients?"
The trust barrier in crypto consulting is a serious problem, but it's not insurmountable. It takes effort to separate the trustworthy from the scammers. By staying informed, asking the right questions, and refusing to be pressured, you vastly improve your odds of finding guidance that propels you forward, rather than setting you back.
Remember, a more trustworthy industry benefits everyone. Do your part, and the potential rewards of the crypto space become much more attainable.
InvoBlox delivers results-driven crypto consulting. CEOs trust our expertise to build profitable crypto portfolios and make strategic decisions aligned with their company's vision. Click Here for 30-min FREE consultation.
FAQS
Start with recommendations, but thoroughly vet even those. Networking within the crypto community is valuable. The best crypto consulting firms usually have a positive presence in relevant online forums or contribute to reputable publications. Be wary of unsolicited offers or ads that seem too pushy.
Besides the examples provided in the article, here are a few more:
"Can you describe your investment philosophy and how it applies to cryptocurrency?"
"What safeguards do you use to protect my assets and information?"
"How do you stay up-to-date on the rapidly changing crypto landscape?"
While no specific "cryptocurrency consultant" certification is universal yet, recognized financial certifications (CFA, CFP, etc.) demonstrate expertise. Membership in blockchain-focused professional organizations can also be a positive sign. Emphasize the importance of looking for credentials that signify ongoing education and adherence to ethical standards.
Acknowledge that scams and bad actors DO exist, which is precisely why smart consulting is needed! Highlight how a legitimate consultant can help with:
-
Risk assessment and mitigation
-
Understanding complex technical concepts
-
Accessing a broader network and trustworthy projects
It depends on your risk tolerance and time commitment. If you are willing to invest time in extensive research and accept a higher potential for losses, you could start independently. However, a consultant, even for a few sessions, can help establish a solid foundation, potentially saving you from costly mistakes early on.
It depends on your individual circumstances. If you're comfortable with extensive research, risk, and navigating a dynamic market alone, you might not. But, for many, especially businesses, a consultant provides valuable guidance and time savings, potentially outweighing the cost.
Fees vary based on the consultant's experience, services offered (portfolio management, tax advice, etc.), and fee structure (hourly, flat rates, etc.). Always discuss this transparently upfront - it's a red flag if a consultant is evasive about costs.
Absolutely! A knowledgeable consultant can be invaluable during an ICO. They help structure the offering, assess regulatory requirements, and often have connections to investors interested in blockchain projects.
The same due diligence outlined in the article applies! Look for verifiable track records, industry recognition, transparent communication, and a focus on education and risk management, not just hype.
Start with referrals, but always do your own vetting. Search industry-specific blockchain associations, reputable crypto publications, and attend relevant conferences to connect with potential consultants.
