# kaal:claim:3067615-018

**Claim.** The 2012 to 2017 ICO model allowed cryptocurrencies to be raised through a token sale without any conditions, landmark requirements, or security measures to protect investors, so that in essence promoters could use ICO proceeds as they pleased.

**Type.** failure  **Support.** argued

**Holds when.**

- ICO models prevailing between 2012 and 2017

**Source quote.**

> First and foremost, the 2012-2017 ICO models allowed cryptocurrencies to be raised via a token sale without any conditions, landmark requirements, or security measures to protect investors.

**From.** Wulf A. Kaal, Marco Dell'Erba, *Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags* (2017), IV. Risk Factors, page 15

**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

**Failure mode.** Unconstrained use of ICO proceeds  (family: investor-protection-gap)

**Topics.** securities-law

**Keywords.** use-of-proceeds, investor-protection, promoter-discretion, ico-structure

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