What is an ICO (Initial Coin Offering)?
ICO which stands for initial coin offering is a method of raising funds through crowdfunding. General public can participate in the ICO and buy tokens of the project which later get listed on the exchange. People invest in ICO's primarily to make good gains as they are getting in earlier before the masses get access to the offering. However one needs to be very careful about ICO investments because not all projects are successful in the long run.
Tokens purchased are not shares/equity of the company.
Jay Clayton says blockchain tech is "blessed" by the S.E.C. as a sector that is worthy of investment under S.E.C. rules. If you issue a ICO, you are a security. Inturn, it is property under the ruling of the IRS and taxable.