Tag: Security Token Offering

Security Token Offering (STO) is a form of fundraising in the field of virtual money and blockchain, similar to Initial Coin Offering (ICO). However, STOs involve the issuance and sale of tokens that are considered security tokens instead of just utility tokens as in ICOs.

A security token is considered a security because it fulfills the elements of a traditional security, such as ownership, voting, interest, or use rights. This places STOs under regulatory and financial regulatory authorities, and requires compliance with securities-related rules and regulations.

The STO process includes the issuance and sale of security tokens to investors. Buyers of security tokens through an STO can expect to receive financial rights and benefits corresponding to the type of security the token represents. These rights and interests may include interest, voting rights in decision-making, ownership of assets, or other rights associated with the project or token issuer.

STOs are often seen as a safer form of funding than ICOs because they comply with securities regulations and provide investor protection. The application of securities rules and regulations also helps to increase transparency and trustworthiness in the virtual currency sector.

Note that implementing STOs may require compliance with securities regulations that are complex and vary from country to country. As a result, STO projects often require strict regulatory compliance and advice from securities and legal experts.