The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings

Bourveau, Thomas; George, Emmanuel T. De; Ellahie, Atif; Macciocchi, Daniele

doi:10.1111/1475-679x.12404

Cited by 96 publications

(34 citation statements)

References 98 publications

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“…Some studies provide preliminary discussions on how blockchain technology can improve current accounting information systems and auditing quality (e.g., Dai and Vasarhelyi 2017;Yu et al 2019;Cao et al, 2019). A recent study by Bourveau et al (2022) examines the role of disclosure and information intermediaries in the unregulated ICO fundraising process. They find that blockchain ventures with higher levels of voluntary disclosure through white papers, technical source code, and social media platforms have a greater ability to raise capital.…”

Section: Prior Literaturementioning

confidence: 99%

Financial reporting for cryptocurrency

Luo

2022

Rev Account Stud

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This study compares and contrasts US and international accounting and financial reporting practices for cryptocurrency. We analyze the financial statements of 40 global companies that have exposure to cryptocurrencies, including cryptocurrency purchases, mining, payments, trading, and investments in ICOs and early-stage blockchain ventures. We document inconsistency between Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), as well as distortions that can mislead users in assessing asset value, liquidity, profitability, and cash-generating abilities across firms. In particular, firms receiving cryptocurrencies in revenue-generating activities account for cryptocurrencies as intangibles using different measurement bases and classify the associated cash inflows differently. Some firms place cryptocurrencies in the usual long-term location of intangibles, while others consider intangibles as liquid, short-term assets. Limited guidance about crypto-assets from both IFRS and GAAP lets companies choose which existing standard to apply and how to apply it. Understanding the financial and valuation implications of these new virtual assets is vital for future accounting research and professional practice.

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Section: Prior Literaturementioning

confidence: 99%

Financial reporting for cryptocurrency

Luo

2022

Rev Account Stud

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“…The third stream of studies focuses on white paper quality, measured through a dichotomous categorization based on the presence of specific information and sections or by quantifying the white paper information content. For example, white papers with a high number of 'technical' words (for instance, 'block,' 'node,' and 'ledger') are considered of higher quality (Bourveau et al, 2022;Lyandres et al, 2019). Chen (2019), Feng et al (2019), andFish (2019) provide evidence that offerings' technical details in the white paper can effectively signal the quality of an ICO project, with a positive effect on the amount of funds raised.…”

Section: Related Workmentioning

confidence: 99%

A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?

Bongini

Osborne²,

Pedrazzoli³

et al. 2022

Technological Forecasting and Social Change

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“…Bourveau et al. [2021] examine crypto analysts’ role in assessing the quality of initial coin offerings. While the interplay of disclosure and consumer regulation has been studied by Cascino, Correia, and Tamayo [2019] in reward crowdfunding markets, Lyandres, Palazzo, and Rabetti [2021] examine the effects of disclosed information on crypto‐based projects’ operational and financial performance.…”

Section: Introductionmentioning

confidence: 99%

Coins for Bombs: The Predictive Ability of On‐Chain Transfers for Terrorist Attacks

Amiram

Jørgensen

Rabetti

2022

J of Accounting Research

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This study examines whether we can learn from the behavior of blockchain‐based transfers to predict the financing of terrorist attacks. We exploit blockchain transaction transparency to map millions of transfers for hundreds of large on‐chain service providers. The mapped data set permits us to empirically conduct several analyses. First, we analyze abnormal transfer volume in the vicinity of large‐scale highly visible terrorist attacks. We document evidence consistent with heightened activity in coin wallets belonging to unregulated exchanges and mixer services—central to laundering funds between terrorist groups and operatives on the ground. Next, we use forensic accounting techniques to follow the trails of funds associated with the Sri Lanka Easter bombing. Insights from this event corroborate our findings and aid in our construction of a blockchain‐based predictive model. Finally, using machine‐learning algorithms, we demonstrate that fund trails have predictive power in out‐of‐sample analysis. Our study is informative to researchers, regulators, and market players in providing methods for detecting the flow of terrorist funds on blockchain‐based systems using accounting knowledge and techniques.

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The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings

Cited by 96 publications

References 98 publications

Financial reporting for cryptocurrency

Financial reporting for cryptocurrency

A topic modelling analysis of white papers in security token offerings: Which topic matters for funding?

Coins for Bombs: The Predictive Ability of On‐Chain Transfers for Terrorist Attacks

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