What is an ICO (Initial Coin Offering)?

What Is an ICO? At their peak in 2017, initial coin offerings (ICOs) had overtaken venture capital as the main fundraising method for blockchain startups. ICO stands for “initial coin offering,” and refers to a formerly popular method of fundraising capital for early-stage cryptocurrency projects.

Are initial coin offerings legal?

Initial coin offerings (ICOs) are legal. However, the ICO is illegal if the project and coin don’t pass the Howey Test used by the U.S. Securities and Exchange Commission (SEC) to determine if an offering is an investment instrument. This action might take place by the developers issuing a simple agreement for future tokens (SAFT).

What is an ICO & why should you invest in cryptocurrencies?

An ICO is intended to raise funds to pay for the costs incurred during a blockchain’s or coin’s development. Investing in cryptocurrencies and other initial coin offerings (ICOs) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs.