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

Journal of Accounting Research, forthcoming

96 Pages Posted: 9 Jun 2018 Last revised: 15 Sep 2021

See all articles by Thomas Bourveau

Thomas Bourveau

Columbia University - Columbia Business School, Accounting, Business Law & Taxation

Emmanuel T. De George

University of Miami

Atif Ellahie

University of Utah - David Eccles School of Business

Daniele Macciocchi

University of Miami Herbert Business School

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2018

Abstract

Using an international sample of 2,113 initial coin offerings (ICOs), we explore the role of disclosure and information intermediaries in the unregulated crypto-tokens market. First, we document substantial cross-sectional variation in the voluntary disclosure practices of ventures seeking to raise capital through ICOs, such as the extent of information released in a prospectus-type document called a white paper; releasing the technical source code; and communicating through social media platforms. Second, we find that, even with limited disclosure verifiability, ventures with higher levels of disclosure have a greater ability to raise capital. Finally, we find that this association is stronger in the presence of mechanisms that lend credibility to ventures’ voluntary disclosures, such as internal governance practices or external scrutiny from information intermediaries. Overall, our results suggest that voluntary disclosure and information intermediaries facilitate the functioning of ICOs as an alternative capital market.

Keywords: initial coin offering, crypto-tokens, disclosure, information intermediaries, ratings, unregulated capital markets

JEL Classification: G1, G2, G3, M4

Suggested Citation

Bourveau, Thomas and De George, Emmanuel T. and Ellahie, Atif and Macciocchi, Daniele, The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings (May 1, 2018). Journal of Accounting Research, forthcoming, Available at SSRN: https://ssrn.com/abstract=3193392 or http://dx.doi.org/10.2139/ssrn.3193392

Thomas Bourveau

Columbia University - Columbia Business School, Accounting, Business Law & Taxation ( email )

3022 Broadway
New York, NY 10027
United States

Emmanuel T. De George

University of Miami ( email )

Coral Gables, FL 33146-6531
United States
305-284-2273 (Phone)

Atif Ellahie (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Daniele Macciocchi

University of Miami Herbert Business School ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
United States

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