ICOs, or token sales, sound as if they should be similar to IPOs (Initial Public Offering), but an Initial Coin Offering has several inherent differences.

An IPO is the first offering of a new company\'s shares to the public. While these securities constitute a share in the ownership of the company, the company may also offer other securities, including capital notes, warrants and bonds, all of which have to be approved by the SEC before the IPO can go ahead. ICOs have no such regulatory structure and are launched through website marketing, generally by a written prospectus called a whitepaper. When the ICO is launched, tokens are issued for sale, sometimes only to registered investors, and native coinage issued for exchange purposes.

 America\'s SEC (Securities and Exchange Commission) and various State regulators are debating as to whether a cryptocurrency token constitutes a security, or a share of company ownership, and whether they should be regulated. On the other hand, since they are digital assets, there is an argument that they don\'t constitute securities, and that SEC-type protective regulations do not therefore apply.

Gaining access to an ICO can be difficult, and many sell out in seconds. Gaining access to an IPO is usually through a third party broker, and the risks are lessened, though not entirely absent.