Initial coin offering

An initial coin offering (ICO) or token sale is a form of capital raising in which a project issues and sells digital tokens using blockchain technology, typically in exchange for cryptocurrency or fiat currency. The tokens may grant access to a product or service, represent participation rights within a network, or function as speculative digital assets traded on cryptocurrency markets.

ICOs emerged in the mid-2010s as a method of financing technology ventures, particularly blockchain-based projects, without relying on traditional intermediaries such as venture capital firms or public equity markets. Depending on their structure and characteristics, tokens offered in ICOs may be treated as securities or fall under other regulatory frameworks, and regulatory treatment varies widely across jurisdictions. Some countries have imposed restrictions or bans on ICO activity, including China, which prohibited domestic token offerings in 2017.

The rapid expansion of ICO markets between 2016 and 2018 was accompanied by significant investor losses, project failures, and enforcement actions related to fraud and unregistered securities offerings. Regulators and international financial institutions have since emphasised investor protection, disclosure requirements, and the application of existing securities laws to many token offerings.