Capital (architecture)

Marketing

Capital market

Financial system

Prospectus

Commerce

Accounting

Archaeology

Economics

Turnover

Business

Corporate governance

Intermediary

Management

Political science

Monetary economics

Information asymmetry

Voluntary disclosure

Industrial organization

Finance

Scrutiny

Credibility

History

Journal of Accounting Research

ABSTRACT Using an international sample of 2,113 initial coin offerings (ICOs), we explore the role of disclosure and information intermediaries in the unregulated crypto‐tokens market. First, we document substantial cross‐sectional variation in the voluntary disclosure practices of ventures seeking to raise capital through ICOs, such as the extent of information released in a prospectus‐type document called a white paper; releasing the technical source code; and communicating through social media platforms. Second, we find that, even with limited disclosure verifiability, ventures with higher levels of disclosure have a greater ability to raise capital. Finally, we find that this association is stronger in the presence of mechanisms that lend credibility to ventures’ voluntary disclosures, such as internal governance practices or external scrutiny from information intermediaries. Overall, our results suggest that voluntary disclosure and information intermediaries facilitate the functioning of ICOs as an alternative capital market.

The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings