ICO stands for Initial Coin Offering. If you understand the concept of an IPO or Initial Public Offering, then it would not be too hard to understand what an ICO is. In an IPO, an investor purchases shares or stock that represent fractional ownership in a corporation. Investors in an IPO do so hoping that the value of their shares would eventually appreciate. The same applies to investors in a cryptocurrency unit, or coin.
The point of departure is in the fact that ICOs are coupons based on the blockchain. They are also, at present, unregulated in many jurisdictions.
Some ICOs are based on the public blockchain while others issue from a private, and in many cases, permissioned blockchain. An issuer of an ICO will often publish a white paper, which serves as a prospectus on why investors should participate in his token sale. To date, ICOs have been able to soak up $1 billion in investment. Half of that money has been shelled out in 2017 alone.
At the present time, no regulator in the West has announced any plans to regulate ICOs as a separate category. At best, many regulators have been issuing warnings and applying current laws to the new fintech paradigm. China however has already shut down ICOs from operating in its territory.