A project publishes a polished website, whitepaper, and roadmap describing an ambitious product, then opens a presale or initial coin offering (ICO) inviting early investors to buy tokens before public launch, often at a discounted price with promises of huge future gains.
Funds raised during the presale go directly to the project's own wallet, with little to no independent escrow or oversight. Some fraudulent ICOs never had any intention of building the described product at all.
After the raise, the team either disappears outright, or launches a token that quietly becomes worthless through inactivity, leaving presale investors with nothing to show for their contribution.