Fundraising through blockchain: Analysis of the opaque relation between Initial Coin Offering and Money Laundering.

Abstract

This master thesis analyzes the relation between financing using blockchain and international money laundering. Blockchain has had a serious impact on several fields of business during the last decade but it mostly affected and threatened finance. The financial application of blockchain aims to bypass central banks and financial intermediaries through the introduction of new forms of decentralized capital raising called, in chronological order, Initial Coin Offering (ICO), Security Token Offering (STO), and Initial Exchange Offering (IEO). Further, this thesis wants to investigate if there is a correlation between capital raising through ICOs/STOs/IEOs and money laundering. To assess that, I created a database which is used to develop a dataset of 17 variables and to calculate the total capitalization by country. The dataset aims to find which are the most favourable and reactive legislations. Instead, the national levels of capitalization are compared with the national GDPs of the countries considered. It emerged that there is no correlation between them, and that tax havens and offshore jurisdictions are the most used locations to launch ICOs/STOs/IEOs. Consequently, I conducted a country-by-country analysis to assess the reasons.