3. Initial Coin Offerings

3.1 ICOs can take many forms, but all of them utilise Distributed Ledger Technology (“DLT”). Investors will typically give Virtual Assets to an ICO issuer in exchange for a proprietary digital medium of exchange on the DLT platform, being termed a “coin” or “token” (where the latter term will be used hereafter). In some cases the proprietary tokens will not represent an underlying financial asset; for example, a DLT token may represent a digital identity record, a voting right, or simply access to software running on a DLT platform.
3.2 Alternatively, an emerging method of fund-raising uses DLT with the tokens representing a “traditional” regulated issuance, such as Shares, Debentures or Units in a Collective Investment Fund. In these instances, a DLT platform may also comprise a share or bond register. We are aware that there are many companies seeking to raise money through such traditional and regulated means using a DLT-enabled platform.