Initial Coin Offerings (ICOs)

Initial Coin Offerings (or Tokens Sales) are the latest innovation to disrupt to the traditional fund-raising model.

Modelled on crypto-currencies such as Bitcoin, ICOs have rapidly become a very popular means by which early stage companies can raise relatively large amounts of money in a short time. In 2017 for the first time the amount of money raised by ICOs exceeded early stage venture capital funding of internet companies. The trend shows no sign of abating.

Whilst many ICOs / token sales have been very successful in providing early stage funding to their issuers and rapid returns to their investors, others have collapsed.

Additionally, ICOs have an uncertain regulatory status across much of the globe, particularly in China and the USA. Whilst the environment is less hostile in the UK, there is a lack of regulatory certainty, meaning that some ICOs could be re-categorised as unlicensed securities offering. Others however, in particular where the offering is access or utility based are less nuanced. 

How we can help you

Collyer Bristow has one of London’s leading teams advising companies and projects raising money through token sales or ICOs. We have worked with numerous companies wishing to sell tokens or ICOs across several industries, including financial services, infrastructure, technology, property, agriculture and healthcare. We can help you navigate through each stage of the ICO process from early stage regulatory analysis to dealing with the operational process of selling coins for Bitcoin (BTC) / Ethereum (ETH) and reviewing and drafting your white paper and terms and conditions of offer.

As indicated by the FCA, whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided on a case-by-case basis. Many ICOs, in particular access and utility based offerings, may fall outside the regulated space if structured correctly. However, depending on how they are structured, some ICOs may share the characteristics and status of regulated investments, meaning that firms involved in an ICO may be conducting unauthorised regulated activities.

We can provide you with the relevant and up-to-date analysis to guide you through the regulatory landscape. Should we conclude that your ICO is a regulated security or investment, we can support applications to the regulator or can work with you to find an authorised firm to help you comply with FCA requirements.

Our Corporate team can also advise you if you are looking for more traditional private equity or venture capital investment, or if you are an investor looking to grow and protect your money.

Additional information