Quote from: CryptoBry on September 09, 2017, 05:58:28 AM

Quote from: CherrySoda on September 06, 2017, 01:22:12 AM

Could someone explain to me how ICO's are different from crowdfunding? Why would it be regulated differently?

Initial Coin Offering (ICO) is almost similar to crowdfunding...I think the big difference is that when we are talking about ICO we mostly linked it to projects in the cryptocurrency sphere while crowdfunding can be any project that is looking for source of capital usually coming from small investors. There had been many crowdfunding platforms that became famous like IndieGoGo...I think those are actually predecessor of the ICO platform (though some may not agree with me on this comparison).

The main difference between crowdfunding platforms such as IndieGoGo / Kickstarter and ICOs is that ICOs are offering part of the profits (in one way or another), while IndieGoGo / Kickstarter campaigns are more of a way to provide earlier, cheaper access to promising new products. ICOs try to raise money by issuing tokens that are in most cases akin to securities while IndieGoGo / Kickstarter campaigns try to raise money be doing pre-sales of their product.

In short, ICOs are a crowdfunded mixture of venture capital and IPOs, which is also why the SEC and China got involved.