Initial Coin Offering

Page Summary

An Initial Coin Offering is a type of funding using cryptocurrencies. It is comparable with an IPO, but then with cryptocurrencies. In most cases, funds are raised from investors in the form of crowdfunding. When investors invest in an ICO, they receive coins or tokens from that project in return. The project uses the raised funds as capital to achieve its goals. 

Initial Coin Offering

ICO Scams

Scammers use ICOs to execute pump and dump schemes. They talk up the value of an ICO to increase the value of its tokens. Later they sell all the tokens for a profit. ICOs are unregulated and banned in countries like China and South Korea. There are a lot of ICO scams because of the lack of regulation. In most cases, the founders of an ICO project conduct an exit scam or rug pull. This means they disappear with investors’ funds and abandon the project. Nowadays there are few ICOs. Sites like Google, Twitter, Facebook, and Youtube banned ICO advertisements. 

Honest ICOs

Ethereum is one example of an honest ICO. Ethereum raised over 31,000 Bitcoin with its token sale in 2014. Other examples of cryptocurrency projects that held ICOs are Filecoin, Brave Browser, and the KIK messaging system. Most ICOs took place in 2017 and 2018. 

ICO Regulation

Several financial regulators are looking into the possibilities of deploying regulated ICO technologies. These so-called Security Token Offerings (STOs) can be listed on regulated stock exchanges. Countries approach the regulation of cryptocurrencies differently. 

From a regulatory perspective, there are two types of cryptocurrencies. Utility tokens and asset-backed tokens. Owners can exchange utility tokens for goods and services. Asset-backed tokens are valuable because they have an underlying asset. Most countries will probably regulate asset-backed tokens. The Abu Dhabi Global Market is seeking guidance on the regulation of these tokens. 


eToro is a multi-asset investment platform. The value of your investments may go up or down. Leveraged and speculative product. Not suitable for all investors. You should consider whether you can afford to take the high risk of losing your money. Capital is at risk. Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision. Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk. Crypto assets are unregulated& highly speculative. No consumer protection. Capital at risk.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.


Please enter your comment!
Please enter your name here

This site is registered on as a development site.