HOW DOES INFORMATION DISCLOSURE OF CRYPTOCURRENCY WHITEPAPER AFFECT INITIAL COIN OFFERING FUNDRAISING SUCCESS?

ABSTRACT

The main function of the initial coin offering (ICO) whitepaper is to eliminate the impact of information mismatch between investment and financing parties. Based on signaling theory, this study analyzes the factors that affect the success of ICOs. To analyze the impact of the disclosure of whitepapers on successful ICO fundraising, the whitepaper information is classified into four directions: fundraising characteristics, project characteristics, human capital, and social capital. At the same time, supplement the ICO project information regarding each cryptocurrency with public information on their official website and social media, ensuring the timeliness and integrity of the analyzed data. Analyze the impact of disclosure on the success of an ICO by constructing a logistic regression model. Due to the two extremes of regulation for cryptocurrency in different countries, either their registration is forbidden or the absence of regulation, resulting in the lack of uniform standards for the information disclosed in the whitepaper, and it is difficult to distinguish between true and false. Low-quality information disclosure has little impact on the successful financing of ICOs and has limited reference value to cryptocurrency investors and investors alike.

KEYWORDS:

• Initial coin offering
• cryptocurrency
• whitepaper
• information disclosure
• signal theory

Acknowledgments

This work was supported by the [Shanghai “Super Postdoctoral” Incentive Program] under Grant [number 2021175]; [Project of Philosophy and Social Science Research in Colleges and Universities in Jiangsu Province] under Grant [number 2021SJA1096]; and [Special Foundation for Science and Technology Program (Soft Science Research for Innovation Support Program) of Jiangsu Province] under Grant [number BR2022011].

Disclosure statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Additional information

Notes on contributors

Zhunzhun Liu

Zhunzhun Liu is currently a postdoctoral fellow at the Post-Doctoral Research Centre of the Shanghai Gold Exchange, which is a joint postdoctoral programme with the School of Management of Fudan University. She has a bachelor's degree in Accounting and Finance from the University of Greenwich, a Master's degree in Financial Management from Robert Gordon University, and a Ph.D. degree in Business Management from Zhejiang University. This paper is a subtopic of her doctoral thesis. Her research interests include Financial Market Infrastructure and FinTech, which focuses on third-party payments and cryptocurrencies.

Lu-Xi Zou

Lu-Xi Zou is a senior engineer, associate professor at the School of Management, Xuzhou Medical University. As first or corresponding author, he has more than twenty papers published in important journals with impact factors and Journal Citation Reports in Web of Sciences. He has experience in the area of Information Management. Her research interests are Information Economy, Fintech, and Machine Learning.