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Investors generally don’t get equity stakes, but rather bet that the tokens, which often unlock services on a to-be-launched product, will rise in value if the startup is successful.

Their surge this year comes despite intense scrutiny from regulators like the Securities and Exchange Commission, well-publicized frauds and scams and a broad selloff in the cryptocurrency market. Those challenges have scared away some retail investors, but big technology-focused investors continue to plow into ICOs in the hopes of hitting it big.


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