What is Initial Coin Offering (ICO)?
Nexa Consultancy | Startup & Finance Glossary
An Initial Coin Offering (ICO) is a fundraising method used by cryptocurrency and blockchain projects. It is analogous to an Initial Public Offering (IPO) in the traditional finance world. In an ICO, a project sells a new cryptocurrency or "token" to investors in exchange for established cryptocurrencies like Bitcoin or Ethereum, or for fiat currency.
Base Term for Startups: ICOs were a popular way for blockchain startups to raise capital during the crypto boom of 2017-2018. However, they have faced significant regulatory scrutiny globally due to the high incidence of fraud and the sale of unregistered securities.
Regulatory Status: The legal status of ICOs varies widely by country. In many jurisdictions, including India, they are largely unregulated or face strict restrictions.
Base Term Example: A new blockchain project conducts an ICO, selling 1 billion of its new "ProjectCoin" tokens to the public to fund the development of its decentralized application.