Cryptocurrency startups who want to shy away from regulators, particularly the Securities and Exchange Commission (SEC) and Internal Revenue Service (IRS) in the United States, have begun to use nonstandard names for token offerings. These names include calling coin sales a token generation event (TGE) or an initial capital building event (ICBM) instead of the usual initial coin offering (ICO).
Much of this has stemmed from the SEC Report of Investigation released in July of 2017 concerning The DAO. The DAO, a distributed autonomous organization, created by Slock.it UG co-founders and sold as an ICO in 2016.
While the ICO was quite successful and raised approximately 12 million Ether (about $150 million USD at the time), a hacker quickly exploited a code flaw and made off with about one-third of the The DAO company assets. Although Slock.it co-founders created a work-around so that ICO participants would receive a refund if they desired, the situation alarmed many and caught the eye of regulators. After review, the SEC opined that The DAO token was a security and needed to be registered as such, even though the SEC declined to pursue any enforcement action regarding The DAO token sale.
The SEC will surely seek to expand regulatory authority into the blockchain space and will evaluate fundraising efforts irrespective of the terminology the coin (or token) offers choose to use. As a result, the initial fundraising efforts of many companies will likely receive scrutiny from US and foreign regulatory bodies, especially as sales become more frequent and attract more capital.