An ICO is an Initial Coin Offering. It’s the crowdfunding strategy employed by businesses that launch cryptocurrencies. An ICO gives the “buyer” access to their coins in exchange for funds. ICOs are not covered by any kind of SEC or other regulatory body oversight. Under the terms of an ICO contract, the managers of a crypto asset company do not have to offer anything to the buyer if their company fails. They don’t have to follow any of the laws that monitor the purchase of other securities.
Before the advent of Regulation A+ crowdfunding legislation, ICOs were really the only way for crypto asset companies to legally raise funds for their businesses. Today, thanks to Reg A+. companies have better options. Though many agencies are still opting to launch ICOs, in part so they can continue to avoid SEC oversight. We believe that ICOs are dangerous and offer very little protection for the buyer. People who buy coins under an ICO cannot even legally be called investors since the coins are not qualified securities.
A better, safer option for investors is a DSO (Digital Security Offering), also known as an STO (Security Token Offering). In many ways, ICOs and DSOs are similar, but there are a few key differences that make all the difference. See DSOs for more information.
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