What Should Be Disclosed in an Initial Coin Offering?

This chapter unsettles the all-too-common assumption that existing Securities Act registration and disclosure requirements offer adequate remedies for the increasingly obvious shortcomings of initial coin offerings (ICOs). It argues that, as currently constituted, the Securities Act and its accompanying regulations offer, at best, only a partial remedy to the disclosure challenges that ICOs pose. Even if subject to the full panoply of disclosures operative in public offerings, ICO promoters would not necessarily disclose all factors material to evaluating and pricing their tokens. Furthermore, even where disclosures are made, they may not be done in ways that investors can easily understand, and technical disclosures would not be subject to the kind of financial statement audits common in more traditional securities offerings.