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ICO is an unregulated means of crowd funding for project via use of cryptocurrency such as Bitcoin, Ethereum, Monero, DASH, Litecoin, Z-cash etc.
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It is like an equity initial public offer (IPO) where right of ownership or royalties of project is offered to investors in form of digital coins in exchange for legal tender or other cryptocurrencies.
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ICO is mostly used to raise funds by start-up firms dealing in block chain technology and virtual currencies.
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Unlike an IPO, which is governed by SEBI regulations, there is no regulator for this kind of crowd sourcing in India.
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China’s Central Bank recently had banned ICO as dubbed it as an illegal public finance mechanism used for issue of securities and money laundering.