In 2017, the explosion of initial coin offerings (ICOs) – a new fundraising method where startups could issue tokens in exchange for early capital they otherwise wouldn’t have access to – helped fuel the crypto mania alongside Bitcoin’s meteoric rise. The new opportunity for crowdfunding rewarded investors who were able to get in on the ground floor in tech startups with strong potential with substantial gains.
But the surge of interest surrounding an unregulated market and wild west environment, also created a cesspool of scams posing as legitimate initial coin offerings. That’s until the United States Securities and Exchange Commission stepped in and began penalizing the businesses launching ICOs with the sale of unregistered securities. Now, the financial watchdog could be targeting the replacement for the ICO that has recently been picking up in popularity: the IEO.