Are Tokens Securities? An Anatomy of Initial Coin Offerings

49 Pages Posted: 12 Dec 2018

See all articles by Evgeny Lyandres

Evgeny Lyandres

Boston University

Berardino Palazzo

Federal Reserve Board

Daniel Rabetti

London School of Economics & Political Science (LSE)

Date Written: November 18, 2018

Abstract

We construct one of the most comprehensive Initial Coin Offerings (ICOs) datasets to study the determinants of ICOs success, post-ICOs returns, and longer-term token returns, volatility and liquidity. To overcome the problem of the generally low quality of ICOs data, we develop ICO data quality measures that allow us to validate the robustness of our results using subsets of data with the highest quality. Most of our results for ICOs are consistent with empirical regularities known to characterize Initial Public Offerings (IPOs) of equities. We argue that some theories that were initially developed to explain empirical patterns in the IPO market may be even better suited to explain some of the empirical results that we obtain for ICOs. In addition, some of the discrepancies between our findings for ICOs and corresponding results for IPOs may be traced to differences in institutional settings. Overall, our results contribute to the debate about whether tokens issued in an ICO should be considered securities by showing that they tend to behave like equities.

Keywords: ICOs, IPOs, regulation

Suggested Citation

Lyandres, Evgeny and Palazzo, Berardino and Rabetti, Daniel, Are Tokens Securities? An Anatomy of Initial Coin Offerings (November 18, 2018). Available at SSRN: https://ssrn.com/abstract=3287583 or http://dx.doi.org/10.2139/ssrn.3287583

Evgeny Lyandres (Contact Author)

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-3582279 (Phone)

Berardino Palazzo

Federal Reserve Board ( email )

1801 K street NW
Washington, DC 20036
United States

Daniel Rabetti

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
1,744
rank
8,488
Abstract Views
3,350
PlumX Metrics