How do initial coin offerings (ICOs) operate on Wall Street?

Initial Coin Offerings (ICOs) are a way to raise capital by offering new cryptocurrency tokens to investors. They have become popular among startups and businesses looking to raise funds for new projects or to scale their existing operations.

ICOs are typically launched on blockchain platforms like Ethereum, Stellar, and TRON. Companies that want to raise funds through an ICO publish a whitepaper that outlines their proposed ICO project and the number of tokens they plan to offer to the public.

Investors interested in participating in an ICO can purchase the tokens using a cryptocurrency like Bitcoin or Ethereum. Once the ICO is complete, the company then uses the funds raised to develop their project or scale their operations.

However, investing in an ICO carries a significant amount of risk due to the unregulated nature of the industry. Many ICOs have turned out to be scams, and investors have lost significant amounts of money. Therefore, it is essential to conduct thorough research on an ICO project and its team before investing in it.

Wall Street has been slow to adopt ICOs, primarily due to regulatory uncertainty. That being said, some institutional investors have started to invest in ICOs, and there are efforts to bring regulation to the industry. In 2018, the SEC declared that some ICOs would be treated as securities, and the agency has taken enforcement action against several ICOs that it deemed to be fraudulent.