A digital asset, coin, or token (aka – virtual currency) is a digital representation of value that functions as a medium of exchange (commodity) and can be traded digitally often using distributed ledger (blockchain) technology. Digital assets may represent other rights as well, including securities. If a security, the digital asset must be offered and sold in compliance with U.S. federal securities laws.
If helpful, here are some basic concepts that you should educate yourself on before considering contributing capital to an initial coin offering, token sale or related offering:
- What is an initial coin offering (ICO)?
- What is a blockchain?
- What is a digital asset trading platform (“exchange”)?
- Who can issue digital assets, coins, or tokens?
- Things to consider when determining whether to contribute capital to an ICO (or related offering)