Speculating on the future of initial coin offerings

Initial coin offerings took the world by storm last year. In total $5bn was raised, a twentyfold increase over 2016. Governments are only now waking up for the need to regulate ICOs and their related tokens. The US Securities and Exchange Commission recently launched a probe. Are ICO tokens currencies? Are they commodities? Are they securities or perhaps something else? How regulators answer these questions—there is no one global answer—will determine the future of ICOs.

Initial coin offerings are a quick way for startups to raise funds from many people on easy terms. Investment comes from evangelists of the firm’s products or services. The entire funding needs of a startup can be raised upfront in one fell swoop, bypassing the need to raise capital in dribs and drabs from traditional sources. Founders love ICOs because they don’t give up shares or control in their companies. People love them for the chance to invest in startups they otherwise would not be able to access.

In an ICO, firms sell their own newly minted virtual tokens to investors…. continue reading at The Japan Times.

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