The Regulation Paradox of Initial Coin Offerings: A Case Study Approach

Frontiers in Blockchain 2(2).

22 Pages Posted: 8 Dec 2018 Last revised: 9 Sep 2019

See all articles by Alfred Zhang

Alfred Zhang

London School of Economics & Political Science (LSE)

Anujan Raveenthiran

York University, Schulich School of Business, Students

Justin Mukai

York University, Schulich School of Business, Students

Ramisha Naeem

York University, Schulich School of Business, Students

Arvin Dhuna

York University, Schulich School of Business, Students

Zoha Parveen

York University, Schulich School of Business, Students

Henry M. Kim

York University - Schulich School of Business

Date Written: November 14, 2018

Abstract

Compared to initial public offerings (IPOs) that are sales of company ownerships, and loans that are sales of debt claims, initial coin offerings (ICOs) are sales of promises of cryptocurrency appreciation. However, regulatory uncertainties continue to prohibit successful widespread adoption. This paper examines ICOs with varying levels of success, including Mastercoin (now Omni) and Kin, as well as fraudulent ICOs, like REcoin and OneCoin. The discussion of the benefits and flaws within the ICO market examines regulatory challenges concerning risks transferred to investors through information asymmetry, while questioning the ability of regulations to enhance investor protection mechanisms without undermining the fundamental value of cryptocurrencies and ICOs as a viable funding structure.

Keywords: Blockchain, Cryptocurrency, ICO, Investment, Policy, Regulation

Suggested Citation

Zhang, Ruoxi and Raveenthiran, Anujan and Mukai, Justin and Naeem, Ramisha and Dhuna, Arvin and Parveen, Zoha and Kim, Henry M., The Regulation Paradox of Initial Coin Offerings: A Case Study Approach (November 14, 2018). Frontiers in Blockchain 2(2)., Available at SSRN: https://ssrn.com/abstract=3284337 or http://dx.doi.org/10.2139/ssrn.3284337

Ruoxi Zhang

London School of Economics & Political Science (LSE)

Houghton Street
London, WC2A 2AE
United Kingdom

Anujan Raveenthiran

York University, Schulich School of Business, Students ( email )

North York, Ontario
Canada

Justin Mukai

York University, Schulich School of Business, Students ( email )

North York, Ontario
Canada

Ramisha Naeem

York University, Schulich School of Business, Students ( email )

North York, Ontario
Canada

Arvin Dhuna

York University, Schulich School of Business, Students ( email )

North York, Ontario
Canada

Zoha Parveen

York University, Schulich School of Business, Students ( email )

North York, Ontario
Canada

Henry M. Kim (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

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