The profits and pitfalls of raising crypto capital

Advocates of initial coin offerings see them as a quick and simple way to raise money for blockchain-based start-ups, while sceptics warn of get-rich-quick schemes and a 'Wild West' market. Joy Macknight looks at the drivers behind this new way of fundraising.

by Joy Macknight

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Initial coin offerings (ICOs) have exploded in number and value over the past year, attracting the attention of regulators across the globe. Put simply, an ICO, or token generating event, is when a blockchain-based company sells digital tokens to fund its business operations, software development or community initiatives.

The total amount raised in 2017 (as of October 9) is $2.7bn from 176 ICOs, according to crypto-currency statistics compiled by CoinSchedule. September saw the greatest amount fundraised via ICOs – about $700m. The largest ICO to date is Protocol Labs’ Filecoin, which generated $257m for the blockchain-based storage network.

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Joy Macknight

Joy Macknight is the editor of The Banker. She joined the publication in 2015 as transaction banking and technology editor. Previously, she was features editor at Profit & Loss, editorial director at Treasury Today and editor at gtnews. She also worked as a staff writer on Banking Technology and IBM Computer Today, as well as a freelancer on Computer Weekly. She has a BSc from the University of Victoria, Canada.