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Cayman Islands Legal Perspective on the Regulation of Initial Coin Offerings (ICOs)
15 August 2024 . 2 min readIntroduction
Initial Coin Offerings (ICOs), used during the past few years as a source of raising capital for early stage blockchain projects, have started to appear so frequently in the financial and/or IT media during the last couple of years that they now seem to be part and parcel of the new social economy. Ethereum launched itself in 2014 by way of an ICO and is now the second largest crypto-currency. According to an ICO-tracking initiative by Coindesk.com, coin and/or token sales worth in excess of US$2.2 billion have been recorded to date.
In brief, ICOs represent a type of unregulated crowdfunding built on blockchain technology and use of cryptocurrencies. Coins or tokens may be issued to represent virtual currencies, equity interests, voting rights, units which are part of a company-wide reward or bonus scheme, membership interests, pre-paid services or products, etc.. However, together with all legitimate ICOs came over 2,000 phishing, hacks or Ponzi schemes, which led to rising interest and warnings from regulators worldwide, especially since another criticism related to ICOs is that investors rush to buy coins/tokens in the hope of “flipping” them later in the market without any due diligence or regard to the value of the underlying product, project or company.
In the first issue of our series dedicated to FinTech-specific risk factors which may impact the Cayman Islands fund industry, we focused on risk factors related to bitcoin and other cryptocurrencies in general (see Top Ten Risks for the Crypto-Currency Investor: A View from the Cayman Islands). In this second issue, we will take a closer look at ICOs, including views from regulators in various countries, and discuss certain provisions of the existing Cayman Islands laws which may be triggered in connection with an offering of coins / tokens.
Latest Updates and News
News | 16 October 2025
Lexology – Legal Influencer Q3 2025
Many thanks to our readers and to our contributing author colleagues for making it possible! Our firm has been ranked as Lexology Legal Influencer for Private client - Central and South America for Q3 2025.
News | 14 October 2025
Loeb Smith has won Law Firm of the Year: Client Service 2025
Robert Farrell and Juliette Schembri were present at the event in hashtag#NYC to accept the award and celebrate this success. This award reflects our corporate group’s dedication to providing outstanding client service to our clients across the globe every step of the way across their matters.

News | 24 September 2025
Cayman Islands – CIMA announces 30 days amnesty for non-compliant directors
The Cayman Islands Monetary Authority (the "Authority") has announced the launch of its One-time Non-Compliant Directors' Amnesty Scheme ("Scheme") - a limited opportunity for eligible registered directors to voluntarily settled outstanding annual fees and accrued penalties at a discounted rate.
News | 21 August 2025
Private Equity Wire US Awards 2025 – you’ve been shortlised
We're proud to be shortlisted at this year's Private Equity Wire® US Awards 2025 in the following categories...
