A study conducted by the University of Luxembourg Faculty of Law, Economics, and Finance, has concluded that the majority of initial coin offerings (ICOs) fail to provide critical information to investors.
The study, titled The ICO Gold Rush: Its a Scam, Its a Bubble, Its a Super Challenge for Regulators, seeks to provide a taxonomy of ICOs to facilitate thinking clearly about them, analyze the various regulatory challenges they pose, and suggest the first steps regulators should consider in responding to the ICO industry. The University examined over 150 ICOs whilst gathering its findings.
The report concludes that At the moment, many ICOs are offered on the basis of utterly inadequate disclosure of information, and as a consequence, the decision to invest in them often cannot be the outcome of a rational calculus.
The findings state that Only 28.5% of the ICOs in our sample mention the law applicable to the ICOs, and that In 69% of the cases there is no information at all as to the regulatory status of the ICO. The study adds that Almost all ICOs rely on legislative loopholes or, more accurately, what the issuing entity hopes (or prays) is a loophole or grey area.
What is your response to the University of Luxembourgs findings?