Mar 19, 2018

ICOs Skyrocketed in 2017, but Few People Know the Basics

Cryptocurrency By Lou Bevilacqua

The number of initial coin offerings (ICOs) has skyrocketed in 2017, raising more than $4 billion for various startups. Until recently, ICOs were a relatively unknown method of fundraising in the blockchain community; however, the use of ICOs has quickly become a prime way to crowdfund new projects.

By issuing digital tokens, companies allow users to trade, spend, and use these tokens within the blockchain platform. Although similar, ICOs are different than initial public offerings (IPOs). One primary difference between IPOs and ICOs is that investors purchasing ICO tokens do not own equity in the company. Another difference is that there are few regulations surrounding ICOs, but IPOs are heavily regulated. This creates a certain degree of risk, because if investors lose money, they have little legal recourse to recover what they put into ICOs.

Startups seeking to offer ICOs typically create a whitepaper detailing the project. This should include the needs that the project intends to address, the number of digital tokens the project is attempting to raise, and how many of the assets the founders are planning to keep. Companies must also set up a website with information about purchasing digital tokens. This streamlined process allows startups to quickly raise funds for new projects.

When deciding if you want to initiate an ICO or significantly invest in digital tokens, you should seek legal assistance from an experienced ICO attorney. Bevilacqua, PLLC has worked with a wide-range of startups, seeking fundraising opportunities. We can walk you through the process and help you achieve your goals. Call us today at to find out how we can help you.