What are Initial Coin Offerings (ICOs)?

Initial coin offerings, also referred to as ICOs or token sales, are a way to fund cryptocurrency projects. An initial coin offering is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks.

How does an ICO work?

An initial coin offering (or ICO for short) is a crowdfunding technique that blockchain projects use to raise capital and create a new cryptocurrency. The ICO market was thriving in 2017 and 2018 — but these days, due to a variety of factors, other methods for token offerings are more popular.

Are ICO tokens regulated?

But although IPOs are regulated by the U.S. Securities and Exchange Commission, as a rule, ICOs are unregulated, and thus many ICO tokens have ended up in hot water because they didn't comply with federal securities laws. Another big difference is that buying crypto tokens doesn't mean you'll have an ownership stake in the company.

When did ICOS start?

The first token sale (also known as an ICO) was held by Mastercoin in July 2013. Ethereum raised money with a token sale in 2014, raising around 31,000 BTC in July, equal to approximately $18.3 million at the time. ICOs and token sales became popular in 2017. There were at least 18 websites tracking ICOs before mid-year.