Initial Coin Offerings

49 Pages Posted: 22 Apr 2018 Last revised: 4 Feb 2019

See all articles by Paul P. Momtaz

Paul P. Momtaz

University of California, Los Angeles (UCLA)

Date Written: July 7, 2018


Initial coin offerings (ICOs) or token sales are smart contracts based on distributed ledger technology (DLT or blockchain) designed to raise external finance by issuing tokens without an intermediary. The technical flexibility of ICO smart contracts may replace conventional financing methods, and the soaring adoption of cryptocurrencies may herald a revolution in entrepreneurial and corporate finance. This paper provides a conceptual and empirical overview of the ICO market. Stylized facts such as initial returns, gross proceeds, money left on the table, time-to-market, and cryptocurrency failure are documented and the determinants of ICO success explored. An event study examines the sensitivity of the ICO market and the cross-section of initial cyptocurrency returns to technical vulnerabilities and adverse regulatory initiatives.

Keywords: Initial Coin Offerings, ICOs, Token Sales, Virtual Currencies, Digital Currencies, Cryptocurrencies, Blockchain, Distributed Ledger Technology, Crowdfunding, Entrepreneurial Finance

JEL Classification: G24, G32, K22, L26

Suggested Citation

Momtaz, Paul P., Initial Coin Offerings (July 7, 2018). Available at SSRN: or

Paul P. Momtaz (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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