An Initial Coin Offering (ICO) is the cryptocurrency industry’s equivalent to an initial public offering (IPO). Companies seeking to raise funds for a new blockchain app or service can launch an ICO as a way to raise funds. Interested investors can buy into an ICO to receive a new cryptocurrency issued by the company, which may have some utility related to the product or service or represent a stake in the company or project. ICOs can be structured in several ways, including static supply and static price, static supply and dynamic price, and dynamic supply and static price.

The crypto project usually creates a pitchbook called a white paper that is available to potential investors via a new website dedicated to the token. The white paper explains important information related to the ICO, such as the project’s purpose, funding requirements, and payment methods. If the money raised in an ICO is less than the minimum amount required by the ICO’s criteria, the funds may be returned to the project’s investors. If the funding requirements are met within the specified period, the money raised is spent in pursuit of the project’s goals.

Regulators in the U.S. and other developed nations monitor ICOs closely to ensure they are registered if necessary. However, anyone can launch an ICO, and it is important to do your homework to ensure the people behind the ICO are real and accountable. Identifying ICOs and scams is crucial, and the U.S. Securities and Exchange Commission (SEC) can intervene in an ICO if necessary.