Initial Coin Offerings, Information Disclosure, and Fraud

Hornuf, Lars; Kück, Theresa; Schwienbacher, Armin

doi:10.2139/ssrn.3498719

Cited by 7 publications

(5 citation statements)

References 18 publications

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“…Our estimates suggest a drop in ICOs of about 21% for each quarter after the ban , which is much larger than the best estimate of the number of ICO frauds in academic work. Hornuf et al (2019) identify about 20% of all ICOs from September 2016 to July 2018 as confirmed or suspected fraud cases. 20 Consequently, the longer-term drop in ICOs after the China/South Korea ICO ban is unlikely to be exclusively driven by a reduced number of outright fraud cases but is also driven by a reduced number of genuine lower-quality ICOs.…”

Section: Discussionmentioning

confidence: 99%

“…One recent paper suggests that 76 billion USD (46 %) of detected illegal activity is financed through cryptocurrencies (Foley et al, 2019). Hornuf et al (2019) examined a sample of 1,393 ICOs that took place worldwide from September 2016 to July 2018. They identified 274 fraud cases (or about 20% of the sample), including 188 suspected and 175 confirmed fraud cases.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

“…The resilience of higherquality ICOs is remarkable by itself, given the extreme turbulence and significant contraction experienced by the global ICO market in the post-ban period. 20 Although some practitioner reports (https://research.bloomberg.com/pub/res/d28giW28tf6G7T_Wr77aU0gDgFQ) have reported much higher fraud cases compared to Hornuf et al (2019), these practitioner reports also suggest that ICO funding volume is largely unaffected by the fraud cases (estimates suggest only about 11% of funding went to identified fraud cases; and when three big scams were removed only 0.3% of all time ICO fundraising went to fraud cases). Still, our findings show a much sharper drop in ICO funding volume in the longer-term after the China/South-Korea ban.…”

Section: Academic Contributionsmentioning

confidence: 99%

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Ban, Boom, and Echo! Entrepreneurship and Initial Coin Offerings

Bellavitis

Cumming

Vanacker

2020

Entrepreneurship Theory and Practice

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Regulatory spillovers occur when regulation in one country affects either the expected regulatory approach and/or entrepreneurial finance markets in other countries. Drawing on institutional theory, we investigate the global implications of a regulatory spillover on entrepreneurship. We argue that regulatory spillovers have both short- and long-term effects on the number and quality of entrepreneurial finance initiatives such as Initial Coin Offerings (ICOs). Based on a large-scale sample of ICOs in 108 countries, we find that a regulatory ban of ICOs in one country causes a short-term increase in the number of low-rated ICOs in other countries and a long-term drop in the number of ICOs, especially low-rated, which increases the average ICO rating. That is, a restrictive regulation triggered a process of increased market selection.

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Section: Discussionmentioning

confidence: 99%

Section: Theory and Hypothesesmentioning

confidence: 99%

Section: Academic Contributionsmentioning

confidence: 99%

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Ban, Boom, and Echo! Entrepreneurship and Initial Coin Offerings

Bellavitis

Cumming

Vanacker

2020

Entrepreneurship Theory and Practice

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“…Howell et al (2020) explore various issuer and ICO characteristics on enterprise survival and employment growth. Hornuf et al (2021) investigate the extent of fraud in the ICO market. 3 Our study does not focus on ICOs and our contribution stands here.…”

Section: Plain English Summarymentioning

confidence: 99%

Security Token Offerings

2020

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“…One recent paper suggests that 76 billion USD (46 %) of detected illegal activity is financed through cryptocurrencies (Folley et al, 2019). Hornuf et al (2019) examined a sample of 1,393 ICOs that took place worldwide from September 2016 to July 2018. They identified 274 fraud cases (or about 20% of the sample), including 188 suspected and 175 confirmed fraud cases.…”

Section: Ico Entrepreneursmentioning

confidence: 99%