The Initial Coin Offering (ICO) Process: Regulation and Risks

Oksana A. Karpenko, Tatiana K. Blokhina and Lali V. Chebukhanova
Additional contact information
Oksana A. Karpenko: Finance and Credit Department, Peoples Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya St., 117198 Moscow, Russia
Tatiana K. Blokhina: Finance and Credit Department, Peoples Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya St., 117198 Moscow, Russia
Lali V. Chebukhanova: Law Institute, Peoples Friendship University of Russia (RUDN University), 6 Miklukho-Maklaya St., 117198 Moscow, Russia

JRFM, 2021, vol. 14, issue 12, 1-7

Abstract: ICOs are very attractive for investors and issuers. ICOs allow funding raising in exchange for cryptographically secure tokens, which are a means of paying for future projects or services. However, there is insignificant regulation of this process all over the world. Some countries have banned crypto assets; others have allowed the free use of tokens but do not give them official status. In this paper, the authors present an overview of the legal regulation of ICOs in different countries, dividing them into three groups: in the first group are the countries with developed legal norms and rules for conducting ICO, they have the subsequent circulation of tokens on their territory; in the second group are the countries that are most friendly to ICOs; the third group of countries has a wait-and-see attitude. The author connect the insufficient law regulation and risks of ICOs in different countries. The types of ICO risks are divided into three main categories: financial, technical, and analytical. The main ways to reduce these risks, depending on their types, are highlighted in this study. They are connected with the improvement of the legal regulation of the publication of a White Paper, the KYC procedure, and the involvement of escrow agents.

Keywords: ICO; crypto asset; regulation of ICO; successful ICO; ICO risks; White Paper of ICO; ICO platforms; funding of ICO projects (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/1911-8074/14/12/599/pdf (application/pdf)
https://www.mdpi.com/1911-8074/14/12/599/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:14:y:2021:i:12:p:599-:d:700771

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().