The term “ICO” is now widely used, covering a vast reality with common features.

An ICO, or Initial Coin Offering, enables entities to raise money in exchange of tokens (sometimes defined as “digital assets”), the issue of which is registered via a blockchain. Tokens are issued in exchange of cash or cryptocurrencies. The use of a blockchain secures in a digitalised and decentralised way the transactions between the issuer and the token holders. Such holders may acquire tokens either directly or through intermediaries.

Tokens and the prerogatives they grant generally play a significant role in a project. They may take many different forms and provide various rights and usages. For instance, holders may be vested with:

• the right to benefit from certain services offered by the project to the community of token holders,
• certain prerogatives in the governance of the issuer, or
• the right to perceive a share of any profits generated by the project financed via the ICO.

In practice, tokens may provide their holders access to unique IT upgrades or to specific services available online, such as cloud storage possibilities.

ICOs generally come into play at an early development stage of a given project. Once issued, the tokens may be used by their holders according to their characteristics and the prerogatives that they offer. As in initial public offering (“IPO”) for projects relying on securities admitted to trading on regulated platforms, tokens may also be exchanged after an ICO on what would be the equivalent of a “secondary market”.