Initial Coin Offerings: Emerging Practices, Risk Factors, and Red Flags

Forthcoming, Fintech Handbook, Florian Möslein & Sebastian Omlor eds., Verlag C.H. Beck (2018)

U of St. Thomas (Minnesota) Legal Studies Research Paper No. 17-18

22 Pages Posted: 14 Nov 2017

See all articles by Wulf A. Kaal

Wulf A. Kaal

University of St. Thomas, Minnesota - School of Law

Marco Dell'Erba

University of Zurich; New York University School of Law; Labex ReFi

Date Written: November 8, 2017

Abstract

Initial Coin Offerings (ICOs) are the most efficient means of financing entrepreneurial initiatives in the history of capital formation. ICOs minimize transaction cost and democratize finance while dis-intermediating banks. Yet, ICOs have increasingly involved cases of abuse, lacking quality, and governance concerns, precipitating calls for increased regulation. This article provides an overview of the evolving ICO market as it exists in November 2017 including the ICO process, roadmap, market conditions, crypto economics for ICO startups, core risk factors for investors, and red flags of ICO practices that require industry or regulatory improvements.

Keywords: Initial Coin Offerings, Blockchain, Distributed Ledger Technology, Artificial Intelligence, Machine Learning, Data Science, Data Scientists, Innovation, Entrepreneur, Start-up, Big Data, Crytpo Economics, Diversification, Optimization, Efficiency, Governance, Bad Actors, Risk Factors, Regulation

JEL Classification: K20, K23, K32, L43, L5, O31, O32

Suggested Citation

Kaal, Wulf A. and Dell'Erba, Marco, Initial Coin Offerings: Emerging Practices, Risk Factors, and Red Flags (November 8, 2017). Forthcoming, Fintech Handbook, Florian Möslein & Sebastian Omlor eds., Verlag C.H. Beck (2018) ; U of St. Thomas (Minnesota) Legal Studies Research Paper No. 17-18. Available at SSRN: https://ssrn.com/abstract=3067615 or http://dx.doi.org/10.2139/ssrn.3067615

Wulf A. Kaal (Contact Author)

University of St. Thomas, Minnesota - School of Law ( email )

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

Marco Dell'Erba

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012
United States

Labex ReFi ( email )

79 avenue de la République
Paris, 75011
France

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