ICOs under global securities regulations

Initial Coin Offerings (ICOs) have witnessed a dramatic growth in the last few years, particularly within the blockchain ecosystem, but more broadly for innovative companies wishing to attract new categories of investors and customers through their online platforms.

ICOs are a new innovative way of raising funds by issuing digital tokens to the public, using blockchain technology[1]. The latter has become very valuable across numerous sectors such as services, healthcare, manufacturing, supply chain management, trade, finance, cross-border payments, etc. Its value lies in the fact that, combined with the distributed ledger[2] concept, it can be used to produce a set of transactions with immutable history and irrefutable records.

This growth of ICOs, a significant number of which have presented similarities with existing financial instruments, has given rise to a strong legal debate under different jurisdictions on whether or not ICOs should be considered as securities, and indeed many regulators have treated them as such.