Initial coin offerings: a risky ride into the Wild West of finance

Companies can now raise funds by issuing their own digital currencies. Ben Judge explains how initial coin offerings work.

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There's a new way to dial up funding for your start-up
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When a company needs funds it can do one of two things: borrow money, or raise it by selling shares in the business. Crowdfunding and P2P platforms have shaken things up a bit, but ultimately they're still dealing in debt or equity. But now there is a third way, one that sits almost entirely outside the traditional financial system: initial coin offerings (ICOs) issuing your own currency.

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Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. 

As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.