Initial Coin offerings: what rights do investors have?

Xiaoju Zhao*, Wenxuan Hou, Jiafu An, Xianda Liu, Yun Zhang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)


This paper reviews the growing literature on initial coin offerings (ICOs) and provides original evidence of the investor protection on ICOs from 37 countries. We show that the anti-director rights and anti-self-dealing index are positively associated with the country-level raised fund of ICOs after controlling for economic and culture factors. The disclosure quality and investor rights as specified in the Whitepapers are generally poor and they are found to be important to raise more funds in ICOs. We argue that the lack of (self-) discipline poses a threat to investor protections. Around 60% Whitepaper do not disclose information on the use of proceeds or management team. Around 80% ICOs do not entitle investors the rights for dividend or vote. Our findings suggest the needs of regulating ICOs to protect investors.

Original languageEnglish
Pages (from-to)305-320
Number of pages16
JournalEuropean Journal of Finance
Issue number4-5
Early online date15 Dec 2020
Publication statusPublished - 2021

Bibliographical note

Funding Information:
Wenxuan Hou and Xiaoju Zhao (Guest Editors) acknowledge financial support from Shanghai University of Finance and Economics and are grateful to Chris Adcock (the editor) for his support for this special issue. We thank the participants at the 1st Conference on Entrepreneurial Financial Management at ESMT Berlin in 2016 and Shanghai Fintech Conference in 2017 for helpful suggestions.


  • Disclosure
  • Fintech
  • Fraud
  • Initial Coin Offering
  • Investor Protection
  • Shareholder right


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