Initial Coin Offering (ICO)

An initial coin offering is a fundraising method in which a project sells newly created tokens directly to the public, usually before the product exists, in exchange for bitcoin, ether or fiat. The model peaked in 2017, when a whitepaper and a smart contract were often the only deliverables. Regulators responded quickly: the SEC's 2017 report on The DAO concluded that tokens sold this way can be securities under United States law, and several enforcement actions followed. Structurally an ICO gives buyers no equity, no dividend and no legal claim on the issuer unless one is written in. Later formats such as exchange-run sales and private rounds with vesting largely replaced the open public sale.