What Should Be Disclosed in an Initial Coin Offering?

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Oxford University Press (2019)


Disclosures in initial coin offerings (ICOs) have ranged widely from informative to incomplete to fraudulent. Consequently, advocates for the investing public have, understandably, called for the registration of ICOs as securities to facilitate better disclosures. As this article shows, however, the disclosures required under the 1933 Securities Act often map poorly on to crypto asset products and infrastructures and will provide limited assistance to investors. Many ICO issuances offer non-traditional, non-financial rights that require and involve different pricing considerations than traditional common equity and debt, and are embedded in technical systems unanticipated by the New Deal. ICOs thus require a reconceptualization of longstanding disclosure obligations and safeguards, as well as a revamped approach towards entities tasked with validating disclosures. This article charts key provisions in the Securities Act’s Form S-1, crowdfunding’s Form C, Form 1-A for Regulation A , and Rule 144A to provide just such a policy framework.

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