Informal Economy and ICO Issuance

42 Pages Posted: 29 Oct 2022

See all articles by Ceylan Onay

Ceylan Onay

University of Brighton

Emre Ozsoz

Fordham University - Department of Economics - Center for International Policy Studies (CIPS)

Michele Meoli

University of Bergamo

Date Written: October 27, 2022

Abstract

This paper evaluates the role of informal economy as a driver of Initial Coin Offerings (ICOs) globally. While advocates of ICOs value its role in entrepreneurial finance, others discuss its role in money-laundering. In fact, informal economy literature shows that money laundering is an integral part of informal economies and regulations and taxes are significant drivers for firms to stay informal. Accordingly, in this paper we investigate the impact of crypto regulations, bans and taxation on ICOs and find a positive impact of regulation and a negative impact of taxation. Next, we analyze the impact of Anti Money Laundering (AML) regulation enforcement. Contrary to the existing research that discusses how ICOs could be a means of money laundering, our research shows that better AML compliance attracts more ICOs. Most importantly we find that countries with larger informal economies also attract more ICOs and discuss that ICOs create an opportunity to access financing for informal entrepreneurs.

Keywords: ICO, initial coin offerings, bitcoin, informal economy, financial regulation, AML/KYC, anti-money laundering, entrepreneurship, informal entrepreneurship

JEL Classification: M13, M15, G32, K22, K42, L26

Suggested Citation

Onay, Ceylan and Ozsoz, Emre and Meoli, Michele, Informal Economy and ICO Issuance (October 27, 2022). Available at SSRN: https://ssrn.com/abstract=4260240 or http://dx.doi.org/10.2139/ssrn.4260240

Ceylan Onay (Contact Author)

University of Brighton ( email )

Brighton
United Kingdom

Emre Ozsoz

Fordham University - Department of Economics - Center for International Policy Studies (CIPS) ( email )

Dealy Hall 5th Floor
441 East Fordham Rd
New York, NY 10458
United States

HOME PAGE: http://www.fordham.edu/academics/office_of_research/research_centers__in/cips/

Michele Meoli

University of Bergamo ( email )

Via Marconi 5
24044 Dalmine, Bergamo
Italy
+390352052026 (Phone)
+390352052077 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
82
Abstract Views
453
Rank
558,798
PlumX Metrics