The ICO Gold Rush: It's a Scam, It's a Bubble, It's a Super Challenge for Regulators
Room 920, Level 9
Melbourne Law School
185 Pelham St, Carlton
Initial coin offerings typically use blockchain technology to offer tokens that confer various rights in return, most often, for cryptocurrency. They can be seen as a conjunction of crowdfunding and blockchain. Based on a database of over 450 ICO white papers, Prof Arner presents a taxonomy of ICOs to increase understanding of their many forms, analyze the various regulatory challenges they pose, and suggest the first steps regulators should consider in response.
ICOs are a global phenomenon and the global ICO market is much larger than generally thought, with overall ICO volume exceeding 20 billion USD as at the end of January 2018. The US ICO market is significant, but the US doesn’t dominate this market, by any means. Furthermore, many ICOs are offered on the basis of utterly inadequate disclosure of information; more than half the ICO white papers are either silent on the initiators or backers or do not provide contact details, and an even greater share do not elaborate on the applicable law, segregation or pooling of client funds, and the existence of an external auditor. Accordingly, the decision to invest in them often cannot be the outcome of a rational calculus. Hallmarks of a classic speculative bubble are present. At the same time, ICOs provide a new, innovative and potentially important vehicle for raising funds to support innovative ideas and ventures, with the potential for aspects of their underlying structure to have an important impact on fundraising systems and structures in future.
Professor Douglas Arner, University of Hong Kong
Professor Douglas Arner
University of Hong Kong
Douglas W. Arner is the Kerry Holdings Professor in Law at the University of Hong Kong and one of the world’s leading experts on financial regulation, particularly the intersection between law, finance and technology. He is Faculty Director of the Faculty of Law’s LLM in Compliance and Regulation and LLM in Corporate and Financial Law, a member of the Hong Kong Financial Services Development Council, an Executive Committee Member of the Asia Pacific Structured Finance Association, and a Senior Visiting Fellow of Melbourne Law School, University of Melbourne. He has published fifteen books and more than 120 articles, chapters and reports on international financial law and regulation, including most recently Reconceptualising Global Finance and its Regulation (Cambridge 2016) (with Ross Buckley and Emilios Avgouleas). His recent papers are available on SSRN at https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id524849 , where he is among the top 300 authors in the world by total downloads.