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Understanding Initial Coin Offerings: Technology, Benefits, Risks, and Regulations publishes white paper with Luxembourg House of Financial Technology (LHoFT) Introduction:

Organizations have raised over $1.8 billion through ICOs since January 2017. As organizations continue to raise tens, sometimes hundreds, of millions of dollars in each token sale, it grows increasingly important for industry leaders, lawyers, policymakers, and academics to understand both the ICO regulatory landscape and the economic and technological attributes of the cryptocurrency and ICO space. Even companies that are not directly involved in the blockchain space should be conscious of how ICOs and tokenization could be leveraged in multiple industries.


The Stellar Development Foundation (SDF) and the Luxembourg House of Financial Technology (LHoFT) have coauthored and published a 40-page white paper on initial coin offerings (ICO). The paper presents in-depth research and analysis in four areas: (1) the technical elements of ICOs, (2) the use-cases, benefits, and risks of ICOs, (3) recommended and forecasted regulatory actions, and (4) global regulatory developments. The paper combines both a regulator’s perspective (per LHoFT) and a technical and economic perspective (per SDF).

The purpose of this paper is to educate industry leaders, lawyers, policymakers, academics, and the general public on the characteristics, use-cases, and regulatory concerns of ICOs.

Key Takeaways: The Technical Elements of ICOs The paper provides a walkthrough of the ICO lifecycle and highlights technical attributes such as choice of issuance platform, token sale models, hard and soft caps, mining, and token owner distribution. The Benefits, and Risks of ICOs There are multiple categories of tokens, each of which features different economic characteristics and regulatory implications. ICOs galvanize open source project development, drive global financial inclusion, and reduce the costs of fundraising. The...
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