A Chinese start-up is aiming to raise $11.5 million in a digital token sale starting Tuesday.

The company, Walimai, is launching the sale in Singapore for funds to expand its technology and develop a loyalty program — both frequent explanations in the booming initial coin offering market. What makes this company different, though, is that its product isn’t financial technology like most of its ICO peers, but rather a play on the fast-moving consumer goods space.

Walimai created anti-counterfeit labels that use a smartphone app to let buyers confirm the authenticity of the product they’re buying. The labels can communicate directly with some phone, or they can be scanned via a QR code. A key feature of the labels, the company said, is that they’re physically tamper-proof because once they are taken off products, they stop working.

Issuing digital tokens through ICOs is an increasingly popular fundraising vehicle for start-ups where investors send some form of digital currency — usually bitcoin or rival token ether — to the companies. In exchange, they get an entirely new token that has some sort of assigned worth. That is, it can be used to redeem a service offered by the firms, or even theoretically give investors an equity stake in a company.

However, since China banned all new digital token sales earlier this year, Walimai set up a new company in Singapore called the WaBi Project. That company will issue 46 million WaBi coins for $0.25 per token to participants, excluding Chinese citizens (who it filters out by checking identifying documents, internet protocol addresses and phone numbers). It will also develop a blockchain-based loyalty program for Walimai customers.

There are about 100 million WaBi tokens in total.

Those tokens can be used instead of cash to buy products with Walimai labels, the company said. Customers can also “mine” additional WaBi coins by continuously scanning the labels.

Walimai’s current focus is in the baby food market in China, but it plans to expand into areas such as wine bottles, cosmetics and pharmaceuticals. In 2008, many Chinese infants fell ill, and some died, after drinking contaminated milk formula; it was one of China’s major food safety incidents in recent years.

Most anti-counterfeit companies have primarily focused on developing their technologies for fashion brands, Yaroslav Belinskiy, Walimai’s co-founder, told CNBC. Instead, he explained, his company opted to address infant formula, for which the “cost of buying fake” is much greater.

“We decided that (with) fashion labels, people actually know when they buy fake. If you pay $50 for a fake bag, you kind of know that it’s a fake,” he said.

Co-founder and company CEO Alexander Busarov added that his personal experiences also factored into the decision to start the company. When he was living in Hangzhou, Busarov tried to buy whiskey from a big western supermarket, but he couldn’t decide if it was fake and he could get sick the next day. “Then I thought, well maybe there should be a solution to it,” he said.

Food safety is critical to Chinese consumers, according to Zennon Kapron, director at Shanghai-based financial technology consultancy Kapronasia, and “baby formula is a good example of that.”

Kapron explained that even though China has, in recent years, relaxed its one-child policy, many Chinese couple are unable to afford having more than one child. “So their child is … the most important thing in their lives,” he said. “So when you look at food safety or education, people are wanting to spend a lot more on that.”

Belinskiy and Busarov, who both come from consulting backgrounds, bootstrapped the company with their own money and received a grant from the Chinese government. The grant was “not that much money, but it was more of a credibility and more of a connection building” endeavor, according to Busarov. Currently, the company has close to 20 people in China, Russia and the Netherlands. In the mainland, Walimai is working with an online shop that sells baby food as well as three offline stores.

But fundraising through digital token sales have come under fire from plenty of critics in recent months. Some commentators have suggested there’s a cryptocurrency bubble. There have also been accusations of fraudulent token sales, cyber-security concerns and regulatory crackdown in markets like China and South Korea. That makes participating in an ICO risky as, often, it’s hard to tell if a token sale is underpinned by a legitimate product.

“On the one hand, ICOs are really great, on the other hand, they’re really dangerous,” Julian Hosp, co-founder and president of Singapore-based start-up TenX told CNBC. Earlier this year TenX raised about $80 million from a token sale.

According to Hosp, there are three problems that are creating a “poisonous ecosystem” for ICOs: First, regulation is still playing catch up compared to the number of ICOs that are being done — companies have raised at least $3 billion in token sales this year. Next, there’s a lack of standards being set by the more established companies on how to do a proper ICO. And there’s the problem of consumer greed helping “scam companies (to) have a chance to survive,” said Hosp.

He explained that many people are participating in token sales without finding out if the company is legitimate because they believe they can quickly sell those tokens in an exchange and make money.

But not everyone shares the same kind of skepticism toward ICOs. Nick Spanos, CEO of Zap and the founder of the Bitcoin Center NYC, told CNBC that he’s “witnessing the birth of a new economy” where forward-thinking people are disrupting “outdated modes” of fundraising.

“In the past, entrepreneurs were forced to sell their souls in exchange for venture capital checks,” Spanos said. “Now, by creating utility tokens that have actual value and a use case, entrepreneurs can raise funds for their disruptive innovations while retaining control over their intellectual property and their blood and sweat.”