Initial Coin Offerings, Information Disclosure, and Fraud

Lars Hornuf, Theresa Kück and Armin Schwienbacher

No 7962, CESifo Working Paper Series from CESifo

Abstract: We study the extent of fraud in initial coin offerings (ICOs), and whether information disclosure prior to the issuance predicts fraud. We document different types of fraud, and that fraudulent ICOs are on average much larger than the sample average. Issuers that disclose their code on GitHub are more likely to be targeted by phishing and hacker activities, which suggests that there are risks related to disclosing the code. Generally, we find it extremely difficult to predict fraud with the information available at the time of issuance. This calls for the need to install a third-party that certifies the quality of the issuers, such as specialized platforms, or the engagement of institutional investors and venture capital funds that can perform a due diligence and thus verify the quality of the project.

Keywords: initial coin offering; fraud; crypto-currencies (search for similar items in EconPapers)
JEL-codes: G18 G38 M13 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Initial coin offerings, information disclosure, and fraud (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7962

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