StrategyIntermediate#Fundraising#Launch
ICO (Initial Coin Offering)
I
Definition
A token-offering label commonly used for a project raising funds or distributing tokens. The label does not determine the token's legal status, the buyer's rights, whether a sale is permitted, or whether a market will exist.
Source reviewed
- SEC: Application of federal securities laws to crypto assets and transactions opens in a new tab
Supports: Current U.S. SEC interpretive release on certain crypto assets and transactions. It does not determine another jurisdiction's treatment or approve a particular offering.
- CFTC: Understanding risks of virtual-currency trading opens in a new tab
Supports: Official investor guidance on virtual-currency trading risks and fraud; it does not endorse a token sale, platform, or investment strategy.
Concept Diagram
Key Takeaways
1
ICO, IDO, IEO, presale, and launchpad labels do not define buyer rights, compliance, custody, or liquidity
2
Legal treatment depends on the sale's facts, transaction structure, jurisdiction, and timing
3
Verify the issuer, exact contract, allocation, unlocks, treasury control, restrictions, and written terms before acting
4
Marketing, listings, and tokenomics charts do not prove value, safety, legitimacy, or future return
Practical Example
A site advertises an 'IDO' and asks for a stablecoin approval. Before signing, a user verifies the responsible entity, eligible jurisdiction, official domain, exact receiving and token contracts, allocation and unlock schedule, treasury controls, refund terms, and applicable restrictions. If these cannot be independently verified, the user does not send funds or sign an approval.
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Related Terms
Strategy
Airdrop HuntingThe practice of taking actions in the hope of becoming eligible for a protocol's future token distribution. Eligibility, allocation, value, and timing are controlled by the issuer and are never guaranteed.
Blockchain
ERC-20An Ethereum token-interface standard for fungible token contracts. It specifies common methods and events, but it does not certify a token, its issuer, its economics, or its safety.
Blockchain
Governance TokenA token that a particular protocol may use to measure, delegate, or assign voting power. Its holder rights, proposal process, quorum, execution, and legal effect are defined by that protocol's contracts and documents, not by the label alone.
Strategy
TokenomicsA due-diligence framework for a token's disclosed supply, issuance, allocation, rights, controls, and use within a specific network or product.
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