ICO Mania: When Every White Paper Raised $50 Million

On 12 June 2017 a project called Bancor opened its token sale and raised about $153 million in roughly three hours. Bancor had a white paper, a team and an idea about trading tokens automatically. It did not have a business with customers. Two weeks earlier the makers of the Brave web browser had sold $35 million of tokens in under a minute. That summer the crypto industry decided it no longer needed banks, venture capitalists or stock exchanges to raise money. It had the initial coin offering, the ICO.

The numbers grew absurd quickly. ICOs raised about $5.4 billion in 2017, according to CoinDesk's tracker, and then $6.3 billion in the first three months of 2018 alone. Block.one, the company behind a blockchain called EOS, raised about $4.1 billion in a sale that ran for a full year. Telegram, the messaging app, raised $1.7 billion privately for a network it never launched. By most counts, most of the projects that raised money in the boom no longer exist.

How an ICO worked

An ICO borrowed the language of a stock market listing, an IPO, and dropped almost everything else. A team published a white paper, a document describing what it planned to build, which played the part of a prospectus but was checked by no regulator, auditor or lawyer. It then sold tokens, digital units recorded on a blockchain, usually in exchange for ether, the currency of the Ethereum network. The sale was run by a smart contract, code that takes in money and sends out tokens by itself, with no bank in between.

Buyers got no shares, no vote, no claim on profits and no legal right to anything. They got a token that the team said would be useful on a network that did not yet exist, and that they hoped to sell for more on a crypto exchange. The model had a respectable parent. Ethereum itself raised about $18 million in bitcoin in a public sale in 2014. In 2017 everyone wanted to be the next Ethereum.

What the money bought

The money mostly bought tokens that fell. In 2018 the advisory firm Satis Group studied about 1,500 ICOs and classed 78% of them as scams. That figure is often misquoted. The scams were mostly small: together they had raised about $1.3 billion, a minor share of the total, because most of the money went to larger projects. A study by Hugo Benedetti and Leonard Kostovetsky of Boston College, published the same year, looked at about 4,000 ICOs that had raised some $12 billion and found that only about 44% were still active, measured by their social media activity, four months after their sale.

Some of the failures were frauds. Centra Tech claimed partnerships with Visa and Mastercard that did not exist and paid the boxer Floyd Mayweather and the music producer DJ Khaled to promote its sale. It raised more than $25 million. Its co-founder Sohrab Sharma was sentenced in New York on 4 March 2021 to eight years in prison. Mayweather and Khaled settled with the Securities and Exchange Commission (SEC) in November 2018, the first cases it brought against celebrities for promoting ICOs without saying they were paid.

Others were real projects that disappointed. Tezos raised $232 million in July 2017, then spent months in a public fight between its founders and the Swiss foundation holding the money. Investors sued, and in 2020 Tezos settled the class action for $25 million.

The crackdown

Regulators moved within months. On 25 July 2017 the SEC published its report on The DAO, a 2016 token sale that had been hacked, and said tokens sold to raise money for a business could be securities, like shares, which must be registered or sold under an exemption. On 4 September 2017 China banned ICOs outright. In December the SEC halted a token sale by a food-review app called Munchee.

The biggest names settled on terms that critics called light. On 30 September 2019 Block.one agreed to pay a $24 million penalty for selling unregistered securities, about half of one percent of what it had raised, without returning the money. Telegram was treated harder. After the SEC won a court order stopping its token from launching, Telegram agreed on 26 June 2020 to return about $1.2 billion to investors and pay an $18.5 million penalty. By 2019 the public ICO had moved offshore or disappeared, replaced by sales run through exchanges, then sales run on decentralised trading sites, then NFT launches and meme coins.

The return

The narrative is dead. The fundraising is not. In July 2025 Pump.fun, a website for launching meme coins, raised about $500 million in roughly 12 minutes by selling its PUMP token at $0.004, though not to buyers in the US or UK. On 10 November 2025 Coinbase, the largest US crypto exchange, opened a token sale platform to American retail buyers for the first time since the 2018 crackdown, after agreeing to buy the token-sale firm Echo for about $375 million. Its first sale, for the blockchain Monad, raised about $269 million from 85,820 buyers at $0.025 a token.

The early results look familiar. PUMP fell below its sale price within weeks and was trading near $0.0017 in April 2026, according to market reports. MON traded around $0.021 in August 2026, about 16% below what Coinbase customers paid.

Washington is now writing the rules the 2017 boom never had. On 18 August 2026 the SEC, under its chairman Paul Atkins, formally proposed "Regulation Crypto Assets". It would let a new project raise up to $5 million once over four years under a startup exemption, or up to $75 million a year under a fundraising exemption, with crypto-specific disclosure and anti-fraud duties, plus a safe harbour that would let a token stop being treated as a security once the team has finished the work it promised. Public comments close on 20 October 2026. If it is adopted, the ICO returns as a regulated product. Whether buyers fare better under disclosure rules than they did under white papers is the question 2017 never answered.