Initial Coin Offering

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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. 

Business24-7 aims to help those interested in cryptocurrency make safe and informed investing decisions. We are dedicated to offering our readers unbiased reviews of leading cryptocurrency exchanges for traders at all levels. Cryptocurrency exchanges are included in our reviews if they are safe, liquid, regulated by proper authority, or decentralized. 

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

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Stefan Grasic (Dipl.-Jur) is the World Wide Director of research for Buisness24-7 and has considerable experience in the financial and investment niche, but also enjoys writing articles for the general readership. Stefan is an active Crypto, Forex and general investment researcher advising blockchain companies at their start up level. He keeps fit by mountain biking, surfing, skiing and lots of other adrenaline sports.


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