# kaal:claim:3067615-002

**Claim.** Tokens sold in an ICO are structurally different from equity: they do not generally confer ownership rights, no right to dividends, and no claim on company assets in bankruptcy, so the risk and reward profile of a token is not that of a share.

**Type.** definitional  **Support.** argued

**Holds when.**

- comparison of ICOs to initial public offerings

**Source quote.**

> Risks and rewards of tokens differ from those of equity. Unlike token ownership, equity typically conveys a right to dividends. In the case of bankruptcy, equity owners have some claims on the assets of the company.

**From.** Wulf A. Kaal, Marco Dell'Erba, *Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags* (2017), I. Introduction, page 3

**Cite as.** Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615

**Verify.** sha256 of source PDF `164ce15b9eb1e8847ebcb073f5b23a96b4974ad0308d77469a9455d4a1ebeb38` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Dell%27Erba%20-%202017%20-%20Initial%20Coin%20Offerings%20Emerging%20Practices%2C%20Risk%20Factors%2C%20and%20Red%20Flags.pdf

**Topics.** tokenomics, systemic-risk, securities-law

**Keywords.** tokens, equity, ownership-rights, bankruptcy, ico-vs-ipo

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