A crypto presale is an early, restricted round where tokens sell at a discount before the public launch. An initial coin offering (ICO) is the public sale that anyone eligible can join. Presale buyers pay less and wait longer. ICO buyers pay more and usually get tokens sooner.
The law does not care much about the label. In the Kik case, a US court found that the company’s private and public token sales were “a single integrated offering”. If the token is a security, both rounds are covered.
This is not financial advice. Most token sales lose money for buyers. Only invest what you can afford to lose.
Key takeaways
- Presales come first, at a lower price, with lockups. ICOs come later and are open to the public.
- Presale discounts pay you for taking more risk with less information.
- US regulators have treated both rounds as securities offerings when the token is an investment contract.
- Telegram had to return more than $1.2 billion to presale investors and pay an $18.5 million penalty.
- In the EU, a public token offer has needed a crypto-asset white paper since December 30, 2024.
Presale vs ICO at a glance
| Presale | ICO (public sale) | |
|---|---|---|
| When | Before the public launch | At or just before launch |
| Who can buy | Often a whitelist, funds or accredited investors | Anyone eligible in their country |
| Price | Discounted | Higher than the presale price |
| Lockup | Common. Tokens vest over months | Shorter or none |
| Information | Early documents, product often unfinished | More public detail and scrutiny |
| Liquidity | None until listing | Soon after the sale |
| Main risk | Project never launches, or launches below your price | Price falls after listing |
What is a crypto presale?
A presale is a funding round held before a token trades publicly. The project sells part of its supply early to pay for development and marketing. In return, buyers get a lower price.
Access is usually limited. Some presales are open only to venture funds or accredited investors. Others use a whitelist, where you register a wallet and get an allocation.
The trade-off is time. Presale tokens often vest, which means they unlock in stages over months. You cannot sell what has not unlocked, whatever the price does.
Telegram is the cautionary tale. It sold about 2.9 billion Grams to 171 initial purchasers. The SEC sued in October 2019, a court blocked delivery of the tokens in March 2020, and in June 2020 Telegram agreed to return more than $1.2 billion to investors and pay an $18.5 million civil penalty. The tokens were never delivered.
What is an ICO?
An ICO is a token sale open to the public. You send crypto or cash, and you receive the new token at a set price or through an auction.
ICOs peaked in 2017 and 2018. Block.one ran one from June 2017 to June 2018 that, in the SEC’s words, raised “the equivalent of several billion dollars”. It later paid a $24 million penalty for not registering the sale.
They never went away. In July 2025, the memecoin platform Pump.fun sold 150 billion PUMP tokens at $0.004 each, about $600 million, in roughly 12 minutes, according to Fortune. A private round days earlier brought the total to about $1.32 billion.
How do the rules treat presales and ICOs?
United States
The SEC set out its position on July 25, 2017. Its report on The DAO warned that offers and sales of digital assets “are subject to the requirements of the federal securities laws” when the asset is a security.
Splitting a sale into private and public rounds does not change that. In the Kik case, the court granted the SEC summary judgment on September 30, 2020, finding that sales of Kin tokens were sales of investment contracts and that the private and public sales formed one offering.
European Union
Under the Markets in Crypto-Assets Regulation (MiCA), anyone offering most crypto-assets to the public in the EU has had to draw up, notify and publish a crypto-asset white paper since December 30, 2024.
How are token sales run today?
Much of the activity has moved onto platforms that handle identity checks and allocations. If you are comparing formats, our guides to joining an IDO and the top crypto launchpads cover sales run on decentralized exchanges.
Large exchanges have moved in too. Coinbase agreed to buy the fundraising platform Echo for about $375 million in October 2025, The Block reported, and opened a public token sale platform to US retail buyers the next month. Its first sale, for Monad, began on November 17, 2025.
How to check a token sale before you buy
- Find out which round you are in. Ask what earlier buyers paid.
- Read the vesting schedule. Note when your tokens unlock and when insiders’ tokens unlock.
- Check who is behind it. Named founders and a registered company are a minimum.
- Look for a white paper that explains supply, allocation and use of funds.
- Confirm you are allowed to take part from your country.
- Verify the sale address on the project’s official site before you send anything.
Our checklist for spotting legitimate crypto presales goes through the warning signs one by one, and key presale metrics explains the numbers.
Which is riskier?
Presales, usually. You commit earlier, know less and wait longer to sell.
An ICO has its own trap. By the time the public can buy, earlier buyers are sitting on cheaper tokens. When those unlock, they can sell at a profit while you are still under water.
- Presale risk: the project fails before launch, or lists below the presale price.
- ICO risk: the price drops once early buyers can sell.
- Both: fake sale pages, unregistered offerings and tokens with no use.
Common mistakes to avoid
- Treating a discount as a profit. It only counts if the token lists higher and you can sell.
- Ignoring vesting. A locked token cannot be sold in a crash.
- Sending funds to an address from a chat message.
- Assuming a presale is exempt from securities law because it is “private”.
- Putting in money you need within a year.
Frequently Asked Questions
What is the difference between a crypto presale and an ICO?
A presale is an early, restricted round at a discounted price before the public launch. An ICO is the public sale. Presale tokens are cheaper but are usually locked for longer.
Is a presale cheaper than an ICO?
Usually, yes. Projects offer a lower price in the presale to reward early buyers for taking more risk and accepting a lockup.
Are crypto presales legal in the US?
A presale is legal if it complies with securities law, either by registering or by qualifying for an exemption. The SEC has brought cases against unregistered sales, including Telegram and Kik.
What happened in the Telegram presale?
Telegram sold about 2.9 billion Grams to 171 initial purchasers. After an SEC lawsuit it agreed in June 2020 to return more than $1.2 billion to investors and pay an $18.5 million penalty.
Do ICOs still happen?
Yes. Pump.fun raised about $600 million in a public sale in July 2025, and Coinbase opened a public token sale platform in November 2025.
What is vesting in a presale?
Vesting is a schedule that releases your tokens in stages over time. Until a batch unlocks, you cannot sell or transfer it.
Last updated: October 6, 2026. Sources: SEC press releases 2017-131, 2019-202, 2020-146 and 2020-262, ESMA guidance on MiCA white papers, Fortune and The Block.
