We all know that ICO is an acronym that means Initial Coin Offering, which is how funds are raised for a new cryptocurrency offering. It is a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether. Its somewhat similar to an Initial Public Offering (IPO) in which investors purchase shares of a company. ICOs are a relatively new phenomenon but have quickly become a dominant topic of discussion within the blockchain community. Many view ICO projects as unregulated securities that allow founders to raise an unjustified amount of capital, while others argue it is an innovation in the traditional venture-funding model. While, IEO's An initial exchange offering (IEO) allows companies to sell tokens to investors to raise capital. This makes them similar to initial coin offerings (ICOs), but there are a few key differences. It is a new approach to crypto-banking that is catching the attention of ICO investors around the world. IEOs can provide many benefits compared to ICOs. They offer greater security for users, improved transparency, bring about a fairer system that can benefit newcomers, and give users a sense that it is a reliable banking system.
You defined both things (ICO & IEO) here clearly and with that let me say that the only big difference between the two is that while in ICO the whole fundraising activities are usually done by the people behind the project, IEO is done under the supervision of the exchange contracted by the project, hence it is called as Initial Exchange Offering. An ICO then can later on transformed itself into an IEO when it is bringing the project to the exchange which accepted it. We are all assuming that the exchanges are doing the vetting or selection process credibly but this is not always the case and that is why many are looking at IEO as just the same dog with a different name. Can we say then is a lesser chance for an IEO project to do an exit scam? Maybe a little but nothing really substantial that we can say there is a guarantee for success. In other words, we must always be careful regardless if we are dealing with an ICO or an IEO.