CCE Initial Coin Offerings (ICOs) 2

Question 1

Which regulatory body issued the 2017 'DAO Report' that significantly impacted ICO regulation in the United States?

Accepted Answer

SEC

Answer

CFTC

Answer

FinCEN

Answer

OCC

Question 2

In ICO terminology, what is a 'hard cap'?

Accepted Answer

The maximum total amount of funds an ICO aims to raise

Answer

The maximum number of tokens that can ever be minted

Answer

The minimum funding threshold required for the project to proceed

Answer

The maximum price per token during the sale

Question 3

What distinguishes a 'utility token' from a 'security token' in the context of ICOs?

Accepted Answer

Utility tokens grant access to a product or service rather than representing an investment contract

Answer

Utility tokens are always more valuable than security tokens

Answer

Security tokens can only be issued by licensed banks

Answer

Utility tokens are subject to stricter regulatory oversight

Question 4

What is 'vesting' in the context of ICO token distribution to founders and team members?

Accepted Answer

A schedule that releases tokens to insiders gradually over a defined period

Answer

Immediately distributing all tokens to founders at launch

Answer

Burning tokens held by founders after 1 year

Answer

Selling founder tokens on exchanges immediately after the ICO

Question 5

Which document in an ICO provides the technical specifications and detailed description of the project's blockchain technology?

Accepted Answer

White paper

Answer

Term sheet

Answer

Prospectus

Answer

Articles of incorporation

Question 6

What is a 'KYC/AML' process in ICOs, and why is it important?

Accepted Answer

Know Your Customer / Anti-Money Laundering — verifies participant identities to prevent financial crimes

Answer

Know Your Competitor / Anti-Money Laundering — used to research rival projects

Answer

Keep Your Coins / Asset Management Ledger — tracks token distribution

Answer

Key Your Credentials / Asset Monitoring Layer — secures investor wallets

Question 7

What happened to many ICOs that raised funds from US investors without registering with the SEC, starting around 2018?

Accepted Answer

Many faced SEC enforcement actions, fines, and were required to return funds to investors

Answer

They received automatic exemptions under the JOBS Act

Answer

The SEC grandfathered all pre-2018 ICOs as compliant

Answer

They were automatically reclassified as utility token offerings