Initial Crypto-Asset Offerings (ICOs), Tokenization and Corporate Governance

Abstract

This interdisciplinary paper by a mathematician and a legal counsel, both from the Paris 1 Panthéon-Sorbonne University, discusses the potential impacts of the so-called “initial coin offerings”, and of several developments based on distributed ledger technology (“DLT”), on corporate governance. While many academic papers focus mainly on the legal qualification of DLT and crypto-assets, and most notably in relation to the potential definition of the latter as securities/financial instruments, the authors analyze some of the use cases based on DLT technology and their potential for significant changes of the corporate governance analyses.

The authors examine in depth the opportunities and risks raised by ICOs, tokenization and distributed ledger technology in terms of corporate governance. First the concepts of ICO and tokenization, and beyond the consequences of distributed ledger technology, will be discussed in the context of a corporate governance perspective; secondly the potential rights granted by different types of crypto-asset holders (whether utility tokens or security tokens) will be carefully analyzed; thirdly the possible governance of a decentralized and distributed organization trying to answer the previous questions will be addressed.

Keywords: Corporate Governance, Tokenization, Blockchain, ICO, DLT, Distributed Ledger Technology, Smart Contract, Token, Initial Coin Offering, Bitcoin, Ethereum, Cryptocurrency, Decentralized Autonomous Organization, DAO, FinTech, Internet, Trust, Securities Law

JEL Classification: D23, D78, E40, G28, K11, K12, K42, L86, O33