An Essay on Minimum Disclosure Requirements for Cryptocurrency & Utility Token Issuers
20 Pages Posted: 3 Jun 2020 Last revised: 24 Jun 2020
Date Written: May 22, 2020
Information asymmetries in financial markets are not a new phenomenon. In a recent poll conducted amongst 76 industry experts, a staggering 83% of participants stated they do not believe utility token issuers disclose enough information to their stakeholders. This essay provides actionable recommendations for disclosure that increase financial and non-financial transparency. These recommendations are valuable for utility token issuers, buyers, intermediaries, and regulators. Financial details include token issuer information, initial and current cash positions as well as token treasury information. Non-financial information includes contact information, project progress updates, and open-source software components. We highlight exemplary token issuers and conclude with the expectation that increasing the amount of information-rich project disclosures should assist in the expansion of the blockchain industry in general. Initial evidence suggests that minimum disclosure best practices also positively affect cryptocurrency and utility token prices.
Keywords: Asymmetric & Private Information, Blockchain, Cryptocurrency, Disclosures, Financial Markets, Governance, Information & Market Efficiency, Regulation, Transparency, Utility Tokens
JEL Classification: D53, D82, G14, G18, G34, K22
Suggested Citation: Suggested Citation