Token Offering

Definition ∞ A Token Offering is a method used by blockchain projects to distribute and sell new digital tokens to investors or users. This process, often conducted through an Initial Coin Offering (ICO), Security Token Offering (STO), or Initial Exchange Offering (IEO), aims to raise capital for project development. Participants acquire tokens that may grant utility within a platform, governance rights, or represent a share in an underlying asset. The structure of a token offering determines its regulatory classification.
Context ∞ Token offerings are a primary mechanism for funding digital asset projects, but they face significant regulatory scrutiny, particularly concerning their classification as securities. Jurisdictions globally are developing specific rules to govern these offerings, focusing on investor protection and anti-money laundering measures. The industry continues to seek clear guidelines to ensure compliant and transparent capital formation for blockchain innovations.