How the quality of initial coin offering white papers influences fundraising: Using security token offerings white papers as a benchmark

Shih Chu Chou, Zhe An Li, Tawei Wang, Ju Chun Yen

Research output: Contribution to journalArticlepeer-review

Abstract

In recent years, many initial coin offerings (ICOs) scams have been reported, attracting attention to this relatively new and unregulated ICO market, which lacks disclosure requirements and therefore suffers from intensifying problems of information asymmetry inherent in crowdfunding. As a prospectus-type document, an ICO white paper serves as a major means of voluntary disclosure practices adopted by ventures seeking external financing. Given the importance of an ICO white paper and the difficulty of assessing its quality, we propose to benchmark it against white paper content for security token offerings (STOs)—a more regulated ICO subset. Using the similarity of ICO white papers with STO white papers to proxy for disclosure quality, we document that the ICO campaigns that have white papers more similar to STO white papers are more likely to raise funding successfully. Our findings provide implications for policymakers, ICO fundraisers, and investors on the importance of white paper quality.

Original languageEnglish
Pages (from-to)3-18
Number of pages16
JournalIntelligent Systems in Accounting, Finance and Management
Volume30
Issue number1
DOIs
StatePublished - 1 Jan 2023

Keywords

  • initial coin offerings
  • security token offerings
  • white paper

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