The last year saw an unprecedented rise in the number of token issuances (also referred to as initial coin offerings (ICOs)) held worldwide. Broadly speaking, companies have two main goals when issuing tokens. First, an ICO theoretically allows a company to raise capital needed to build and expand without issuing true equity or debt.1 Second, an ICO may be an effective way to widely distribute a company’s tokens, which can then be used on the company’s platform to purchase goods and services.

This article was originally published in Tax Notes.