New Blockchain Intermediaries: Do ICO Rating Websites Do Their Job Well?

Abstract

Fintech revolution, crowdfunding and blockchain financing have dramatically reduced borrowing and lending transaction costs. Many argued that, ultimately, it would lead to complete disintermediation of start‐ups and SMEs financing. However, persistent asymmetric information and moral hazard problems led to creation of new cyber industry of intermediaries that play vital role in new innovative financing methods. We review the new ecosystem build around Initial Coin Offerings (ICOs) and study the role of the ICO aggregators, listing and rating agencies. We find statistical confirmation that extensive coverage of a particular ICO in the ICO aggregators’ lists is associated with more successful fundraising campaigns, although ratings data seem to vary considerably across different ratings websites and seem not to be of great quality, so investors should treat such ratings with caution.