ICO – Initial Coin Offering

ICO

ICO is a mean of attracting financing for projects under which ICO initiators issue digital assets (tokens) in exchange for products, services, assets or other benefits. Since 2017 the number of ICOs has been grown tremendously. Despite its simplicity in comparison to traditional fund raising, there are lots of challenges that ICOs face, including regulatory uncertainty, potential risks connected with securities and commodities laws, security threats to name a few. The recent trends show that investors become more attentive to ICO strategies and require more formal documentation to be reviewed.

In 2018 we saw that ICO industry reached its peak, though the number of ICOs still grows to cover investors high demands. However, in comparison to the last year, investors think thoroughly before participating. Many investors make their decisions based on reputable rating agencies and ICO aggregators.

ICO initiators face legal demands and are required to be complied with consumer protection law, KYC and AML regulatory requirements, data protection law, regulatory licenses, etc. As a result, expenses for launching an ICO have been increased making ICO projects available for more professional teams. In addition to applicable laws, investors ask for clarification on a token nature in order to make sure that the token does not fall under scope of securities laws.

Based on the above, ICO initiators are required to collect a team with a proven track record of expertise, show detailed investment guides, legal and technical documentation. It is vital to be attentive with regulation requirements to understand whether or not an ICO is subject to any registration requirements.

This year shows that the number of closed sales grows that attracts medium-sized and large investors.

These are the recent trends of ICO market. It shows that as ICOs become more formalized, this emerging industry starts attracting serious investors. Predictability advances ICO market and, on average, projects becomes more successful.