The Law and Finance of Initial Coin Offerings

Gurrea-Marttnez, Aurelio; Remolina, Nydia

doi:10.2139/ssrn.3182261

Cited by 15 publications

(8 citation statements)

References 8 publications

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“…The papers devoted to this topic analyse a variety of questions related to the regulation of cryptoassets (also called tokens), including cryptocurrencies and ICOs (e.g. Gurrea-Martínez and Remolina, 2018; Wiśniewska, 2018). These assets are not addressed by any accounting standards, that leads to challenges in their classification and measurement and reflects the lack of economic characteristics for a “standard” intangible asset (Procházka, 2018) or a financial asset (Smith et al , 2019).…”

Section: Key Research Topics: Focus and Critiquementioning

confidence: 99%

Blockchain in accounting research: current trends and emerging topics

Garanina

Ranta

Dumay

2021

AAAJ

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PurposeThis paper provides a structured literature review of blockchain in accounting. The authors identify current trends, analyse and critique the key topics of research and discuss the future of this nascent field of inquiry.Design/methodology/approachThis study’s analysis combined a structured literature review with citation analysis, topic modelling using a machine learning approach and a manual review of selected articles. The corpus comprised 153 academic papers from two ranked journal lists, the Association of Business Schools (ABS) and the Australian Business Deans Council (ABDC), and from the Social Science Research Network (SSRN). From this, the authors analysed and critiqued the current and future research trends in the four most predominant topics of research in blockchain for accounting.FindingsBlockchain is not yet a mainstream accounting topic, and most of the current literature is normative. The four most commonly discussed areas of blockchain include the changing role of accountants; new challenges for auditors; opportunities and challenges of blockchain technology application; and the regulation of cryptoassets. While blockchain will likely be disruptive to accounting and auditing, there will still be a need for these roles. With the sheer volume of information that blockchain records, both professions may shift out of the back-office toward higher-profile advisory roles where accountants try to align competitive intelligence with business strategy, and auditors are called on ex ante to verify transactions and even whole ecosystems.Research limitations/implicationsThe authors identify several challenges that will need to be examined in future research. Challenges include skilling up for a new paradigm, the logistical issues associated with managing and monitoring multiple parties all contributing to various public and private blockchains, and the pressing need for legal frameworks to regulate cryptoassets.Practical implicationsThe possibilities that blockchain brings to information disclosure, fraud detection and overcoming the threat of shadow dealings in developing countries all contribute to the importance of further investigation into blockchain in accounting.Originality/valueThe authors’ structured literature review uniquely identifies critical research topics for developing future research directions related to blockchain in accounting.

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Section: Key Research Topics: Focus and Critiquementioning

confidence: 99%

Blockchain in accounting research: current trends and emerging topics

Garanina

Ranta

Dumay

2021

AAAJ

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“…The first under-researched area is the regulatory responses to ICOs. Regulating crypto assets is challenging (Goldstein, Jiang and Karolyi, 2019;Howell, Niessner and Yermack, 2019;Gurrea-Martínez and Remolina, 2018;Kaal, 2018). Important issues such as token classification (Gurrea-Martínez and Remolina, 2018;Kaal, 2018) and therefore which laws (commodities or securities) should be used to regulate them (Brummer, Kiviat and Massari, 2018), and the risk of overregulation (Barsan, 2017;Blemus, 2017) are largely unresolved.…”

Section: Future Research Directionsmentioning

confidence: 99%

Initial Coin offerings: what rights do investors have?

Zhao

Hou

et al. 2020

The European Journal of Finance

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“…Payment tokens have properties comparable to currencies, utility tokens offer digital access to products or services, and asset tokens function more as securities. Another type of token classification is from a legal perspective in which tokens are categorized as either security tokens or non-security tokens (Gurrea-Martínez and León, 2018). Filecoin is an example of utility and non-security tokens which grant users access to its cloud storage using the decentralized platform, and Science Blockchain is an example of asset and security tokens which return up to 70 percent of the income stream to the tokenholders.…”

Section: Initial Coin (Currency) Offeringsmentioning

confidence: 99%

“…One vein of the extant literature on the ICO mainly focuses on regulation and risk aspects, such as level of regulatory compliance, regulatory approaches in different jurisdictions and vulnerability to fraud and criminal activities. Gurrea-Martínez and León (2018) analyze existing regulatory approaches in different jurisdictions and propose a new legal system potentially used by regulators and policy-makers to deal with ICOs. Maume and Fromberger (2019) examine the legal framework for ICOs in the European Union (EU) and suggest desirability of a harmonized application of securities laws to ICOs in the EU and the USA.…”

Section: Review Of Ico Studiesmentioning

confidence: 99%

ICOs, the next generation of IPOs

Joo

Nishikawa

Dandapani

2019

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Purpose The purpose of this paper is to recognize the benefits of the initial coin offering (ICO) as a way of raising funds and to present a detailed comparison between the ICO and the initial public offering to realize the future possibilities that this new funding method holds. Design/methodology/approach It is an exhaustive review of the ICO, the mechanism of crowdfunding, the blockchain technology behind it, benefits and current shortcomings of the ICO, and the potential future development of the ICO as a convenient and efficient way of raising capital. Findings ICOs have brought billions of dollars of funding to startups and projects worldwide in less than two years. Concurrently, many successful ICOs yielded extremely high returns to investors and believers of this new way of funding businesses. Research limitations/implications While the ICO is a revolutionary vehicle for business funding, it has raised concerns among users as well as potential investors about its risk and lack of regulation. The future of this innovative funding method highly depends on further development and placement of appropriate regulatory supervision, better understanding of risk and benefits and attaining the confidence of users. Originality/value This is a review of the advantages and drawbacks of the ICO. If the current fraud, market and cybersecurity risks can be mitigated and standardized regulations are developed, the ICO has a future to become an established way of capital funding or even replace the existing options, regardless of the size and age of companies.

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The Law and Finance of Initial Coin Offerings

Cited by 15 publications

References 8 publications

Blockchain in accounting research: current trends and emerging topics

Blockchain in accounting research: current trends and emerging topics

Initial Coin offerings: what rights do investors have?

ICOs, the next generation of IPOs

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