Investor reactions to crypto token regulation

Jeroen Koenraadt and Edith Leung

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Despite calls for regulation in the crypto utility token market, it is unclear how crypto tokeninvestors value current regulatory proposals. We find that on average, investors react negatively to news thatincreases the likelihood of securities and transparency-related regulation. We also find that this negativereaction is attenuated for tokens rated higher on quality and transparency by intermediaries, those thathave higher levels of disclosure, and listed on more liquid exchanges. The observed variation in tokentransparency and this muted reaction suggest investors perceive disclosure costs to be lower for tokens inmore transparent environments, suggesting that transparency matters to investors.

Keywords: regulation; transparency; cryptocurrencies; financial markets; crypto tokens (search for similar items in EconPapers)
JEL-codes: G10 (search for similar items in EconPapers)
Date: 2022-07-08
New Economics Papers: this item is included in nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in European Accounting Review, 8, July, 2022, 33(2), pp. 367 - 397. ISSN: 0963-8180

Downloads: (external link)
http://eprints.lse.ac.uk/121614/ Open access version. (application/pdf)

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:ehl:lserod:121614

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().