STOs take down ICOs
Security Token Offering are fighting for investors' interest with traditional Initial Coin Offerings. Do they really differ so much? Is STO better and more useful form for your business project?
Security Token Offering is the new Initial Coin Offering
ICOs were a big boom on the market: a new wild west of collecting funds for business projects. A fresh land, unregulated and free.
That freedom usually came with a price of insecurity - if law doesn’t catch up with the market changes, the sector easily become the prey of fraud and exploitation.
With those issues plaguing the industry, offering coins became often perceived as unreliable and mischieving activity, aimed for tricking the investors and steal thay money. At the certain point, even Google and Facebook decided to block the advertisements connected with cryptocurrencies.
For some people the freedom and lack of regulations was the anarchistic essence of ICOs. For others - a curse, preventing business from enjoying the fruits of cryptocurrencies development.
At a certain point, to cut off the possibilities of fraud, earn back the trust and open to new possibilities, crypto market had to catch up with law. The new form of releasing tokens was basiaclly adjusted to fit the regulations surrounding traditional IPOs.
What STO means to the business?
Many of the coin offerings provide promise of the future profits, and therefore are securities in the light of US law. The tokens are digital representation of shares, so they are subject to the law, and consequently fall under Securities and Exchange Commission supervision.
The regulations make the process more stable and fit for business appliances. Crypto tokens move from gambling to being a proper investment.
Well, they are still ICOs - but a special kind of ICOs, adjusted to the US regulations: more reliable, predictable and safe. Technically, they do not differ a lot, and STO might be a better choice for the communication purposes and building trust in the business community.
If you wish to know more, check our Short Guide to Security Tokens.
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