Legal Challenges of Initial Coin Offerings (ICO)

Abstract

Initial Coin Offerings (ICO) – a term intentionally mirroring Initial Public Offerings (IPO) – seem to be the new hype of the virtual currency community leading to an all-time high of the bitcoin of almost 5,000$ this year1. There is indeed a frenzy developing around ICOs reaching a record high of $1.7 billion in 20172 sparking an increasing interest from regulators on the American and Asian continents. Thus, ICOs have become a venture capital-raising tool for start-ups developing projects and applications on the blockchain and trying to escape the constraints of regulation.

Regulation however seems to chatch up with ICOs. This paper analyzes ICOs from a legal perspective with a particular focus on European and French law.

Keywords: ICO, Initial Coin offering, Blockchain, Bitcoin, Ether, Ethereum, The DAO, tokens, virtual currencies

JEL Classification: K22, K33