Investor reactions to crypto token regulation

Koenraadt, Jeroen ORCID: 0000-0001-9908-2250 and Leung, Edith (2022) Investor reactions to crypto token regulation. European Accounting Review, 33 (2). 367 - 397. ISSN 0963-8180

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Abstract

Despite calls for regulation in the crypto utility token market, it is unclear how crypto tokeninvestors value current regulatory proposals. We find that on average, investors react negatively to news thatincreases the likelihood of securities and transparency-related regulation. We also find that this negativereaction is attenuated for tokens rated higher on quality and transparency by intermediaries, those thathave higher levels of disclosure, and listed on more liquid exchanges. The observed variation in tokentransparency and this muted reaction suggest investors perceive disclosure costs to be lower for tokens inmore transparent environments, suggesting that transparency matters to investors.

Item Type:	Article
Additional Information:	© 2022 The Author(s)
Divisions:	Accounting
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance
JEL classification:	G - Financial Economics > G1 - General Financial Markets > G10 - General
Date Deposited:	31 Jan 2024 12:00
Last Modified:	20 Dec 2024 00:52
URI:	http://eprints.lse.ac.uk/id/eprint/121614

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