The New York Times has a good piece on one of the new tech-funding trends of 2017: initial coin offerings (ICOs for short).

It’s an alternative to VC investment or crowdfunding for startup entrepreneurs: “Instead, before they even have a working product, they are creating their own digital currencies and selling so-called coins on the web, sometimes raising tens of millions of dollars in a matter of minutes,” is its handy definition of an ICO.

It cites a study by research firm Smith & Crown claiming that 65 projects have raised $522m from ICOs this year alone, while warning that these offerings sit outside the traditional regulatory oversight of the finance industry.

“Where some see a new method of crowdfunding online projects, critics say the phenomenon is ripe for abuse and, in many cases, a violation of American securities law,” as the NYT put it.

Union Square Ventures’ Fred Wilson also weighs in. “There is a gold rush mentality in the sector right now and many people are doing the wrong things for the wrong reasons,” he said, while stressing that he is “long term very bullish” on new currencies.

Read the full piece and ponder: when will we see a music startup turn to an ICO for funding?

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