Finance Seminar - Dr Kenny Phua - UTS

A seminar by Dr Kenny Phua from the University of Technology Sydney

Title: Don’t trust, verify: The economics of scams in initial coin offerings

Abstract: Losses from fraud and financial scams are estimated to exceed U.S. $5 trillion annually. To study the economics of financial scams, we investigate the market for initial coin offerings (ICOs) using point-in-time data snapshots of 5,935 ICOs. Our evidence indicates that ICO issuers strategically screen for naive investors by misrepresenting the characteristics of their offerings across listing websites. Misrepresented ICOs have higher scam risk, and misrepresentations are unlikely to reflect unintentional mistakes. Using on-chain analysis of Ethereum wallets, we find that less sophisticated investors are more likely to invest in misrepresented ICOs. Overall, our findings show financial scams use screening strategies to target victims and reinforce the importance of conducting due diligence.


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Allan Barton Forum
Kenny Phua