Crypto-currencies and ICOs ::are they scams? : an empirical study

The volume of Initial Coin Offerings has risen steeply with an all-time high market capitalisation of close to USD 1 trillion in December 2017. Since then the digital asset market has slumped, retreating to merely approximately USD 200 billion in mid-2018. Stakeholders of the crypto industry have pondered the reasons for this retrenchment and are increasingly focusing on the notion that many ICOs could be scams. A recent industry study even went as far to claim that 80% of all ICOs are indeed scams. In this paper, we investigate the question whether scams are as common in the crypto field. We do so by, first, defining what a scam is and, secondly, by drawing on empirical data to assess the number of cases fitting such a definition. Building on Principal Agent Theory and based on the statistical analysis of our empirical data set we attempt to establish the current state of affairs with regards to scams in the crypto-currency world. The results of our study divert from salient beliefs