Security Token Offering (STO)
A Security Token Offering (STO) is a type of fundraising event that is similar to an Initial Coin Offering (ICO). It is a way for companies to raise capital by issuing digital tokens that represent a security, such as a share in the company. STOs are regulated by the Securities and Exchange Commission (SEC) and must comply with securities laws. The tokens are typically issued on a blockchain platform and can be traded on secondary markets.
History of Security Token Offerings
Security Token Offerings (STOs) have been around since 2017, when the first STO was launched by the blockchain-based startup, Polymath. Since then, the STO market has grown significantly, with more than $1 billion raised in 2019 alone. STOs have become increasingly popular as a way for companies to raise capital, as they offer a more secure and regulated alternative to ICOs.
Comparison of STOs and ICOs
| STO | ICO |
|---|---|
| Regulated by the SEC | Not regulated |
| Tokens represent a security | Tokens represent a utility |
| Tokens can be traded on secondary markets | Tokens cannot be traded on secondary markets |
Summary
Security Token Offerings (STOs) are a type of fundraising event that is similar to an Initial Coin Offering (ICO). They are regulated by the Securities and Exchange Commission (SEC) and must comply with securities laws. The tokens are typically issued on a blockchain platform and can be traded on secondary markets. For more information about STOs, visit the SEC website or consult a financial advisor.
See Also
- Initial Coin Offering (ICO)
- Blockchain
- Cryptocurrency
- Digital Token
- Security
- Equity Token
- Utility Token
- Smart Contract
- Tokenization
- Digital Asset
