{"id":39268,"date":"2022-08-29T14:53:30","date_gmt":"2022-08-29T12:53:30","guid":{"rendered":"https:\/\/www.coinpro.ch\/glossar\/token-sale\/"},"modified":"2025-08-08T10:00:14","modified_gmt":"2025-08-08T08:00:14","slug":"token-sale","status":"publish","type":"encyclopedia","link":"https:\/\/www.coinpro.ch\/en\/glossary\/token-sale\/","title":{"rendered":"Token Sale"},"content":{"rendered":"

A token sale, also known as an <\/span>Initial Coin Offering (ICO)<\/b><\/a> is a widespread concept in crypto projects, where companies sell a certain amount of tokens to the public to raise funds for their projects. In essence, it is a <\/span>crowdfunding campaign in which investors typically pay with cryptocurrencies such as Bitcoin<\/a> or Ethereum<\/a> and in return receive tokens<\/a><\/b>, which they can later exchange on trading platforms for other cryptocurrencies or fiat currencies.<\/span><\/p>\n

Risks<\/h2>\n

There are some risks with token sales that potential investors should be aware of. <\/span>A major problem is the lack of regulation. In some cases, there is hardly any investor protection, so that investors have to bear the full entrepreneurial risk. Reporting obligations and regulations on recourse claims, should the project or the underlying company become insolvent, are also usually not available. <\/span><\/p>\n

Another risk is that fraudsters see their chance due to the anonymity of blockchain technology<\/a>. <\/span>Even if the projects are reputable, there have been many cases in the past where investors have lost their invested capital. Boston College has published a study on this. A total of 4,003 ICOs were examined. The study showed that over half of the ICO startups examined in 2017 did not survive for more than four months. Investors should be aware of this and think in advance about whether the business model really has a chance. <\/span><\/p>\n

Another problem with token sales is that there are some projects that cannot provide complete or realistic plans on how they can achieve their planned goals. Some projects are created merely as a means of raising capital, but without a real possibility of implementing the planned project. Here, too, the lack of regulation plays into the hands of investors. <\/span><\/p>\n