What is an ICO? How initial coin offerings work and why they are risky
By SendPay Business · · 2 min read
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An ICO, or initial coin offering, is a way for a crypto project to raise money by selling newly created tokens to the public, usually in exchange for other cryptocurrencies. ICOs were very popular around 2017 and 2018.
How an ICO works
- A project publishes a white paper describing its plan and its token.
- It sets a price and a sale period for the new tokens.
- Buyers send crypto to the project's smart contract or wallet.
- Buyers receive the new tokens, which may later trade on exchanges.
ICO vs IPO
In an IPO, a company sells shares under strict securities rules, with audited accounts and legal duties to shareholders. Tokens from an ICO usually give no ownership in a company, and many ICOs had little or no oversight.
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Why they are risky
Many ICO projects never delivered what they promised, and some were outright scams where the team disappeared with the money. Regulators in several countries have since treated many tokens as securities and taken action against unregistered sales.
Where SendPay fits
SendPay does not run or list token sales. A SendPay platform lets your customers buy, sell and hold crypto next to their cash, with assets held with regulated partners and a trading fee you set.
How it works
Your own money app- 1Name it and pick your colours
- 2Choose what it does
- 3Launch when you are ready
Why sign up
Create your free SendPay account
It's all about creating your own financial platform with ease. Start with a free account today.
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- 💳Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
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- 🚀Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
When do locked tokens unlock?
See how a vesting schedule grows the circulating supply.
Token unlock calculator →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.