SAFE Research  Seminar: Assistant Professor Yang Ding

Research Support Assistant, School of Business, Management & Economics, University of Sussex

Yvonne Barnes

Between Transparency and Privacy: Investor Identity Verification and the Demand for Crypto Tokens

SAFE Research Seminar Series

A series of research seminars on sustainability in accounting, finance & economics (SAFE)

<h4>Authors: </h4><h4>Vedran Capkun, Ying Dang and Pepa Kraft</h4> AbstractTackling widespread use of crypto tokens in illegal transactions and international money laundering requires new accounting regulations and devices. Firms that issue crypto tokens can increase transparency by performing investor identity verification (IIV). We analyze IIV, its association with demand for crypto tokens, and find that know-your-customer (KYC), anti-money laundering (AML), and counter-terrorism financing (CTF) verifications are associated with higher demand for crypto tokens. In the period following the SEC intervention that banned a sale of crypto tokens by both US and international issuers to US investors, we observe a greater decrease in demand for the crypto tokens of firms that did not adopt IIV and thus cannot verify their investors’ residency. The effect is limited to the secondary market. In the primary market, IIV is associated with lower demand, suggesting privacy concerns outweigh transparency benefits at issuance. We provide new evidence on externalities of imposing information flow from investors to firms. Keywords: crypto tokens, know-your-customer, anti-money-laundering, investor privacy Bio:<a href="https://url.uk.m.mimecastprotect.com/s/j9PcCl7MzH2gWRq0SGfvszrpYH?domain=business.uc3m.es" title="https://url.uk.m.mimecastprotect.com/s/j9PcCl7MzH2gWRq0SGfvszrpYH?domain=business.uc3m.es" target="_blank" data-msys-clicktrack="0" rel="nofollow noopener noreferrer">https://business.uc3m.es/es/faculty/profesor/perfil/yang-ding</a>

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SAFE Research Seminar: Assistant Professor Yang Ding

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SAFE Research Seminar: Assistant Professor Yang Ding

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