The New ICO Intermediaries
5 Italian Law Journal 731 (2019)
25 Pages Posted: 18 Feb 2020
Date Written: February 18, 2020
Smart contracts promise a world without intermediaries. However, that promise has quickly proved elusive, including in the context of Initial Coin Offerings (ICOs), a vehicle for funding startups built on smart contracts and blockchain. Particularly as ICOs attract retail investors who are not code-literate, the question arises: is there a role for new intermediaries? This article assesses the possibility of an ICO auditor, providing a framework for understanding potential audit functions. In particular, it identifies three main roles: to translate the code for retail investors who are not code-sophisticates, to reconcile the code with promises made in other materials aimed at ICO participants, and to verify offline activity and identity where these remain important to the transactions. It then maps these functions onto emerging models.
Keywords: startups, gatekeepers, tokens, ICO, initial coin offering, securities, auditor, investors, smart contract, blockchain, code, capital markets, CONSOB
JEL Classification: K00, K2, K22, G15
Suggested Citation: Suggested Citation