A STO can be understood as a reprinting and a small amount of ICOs, which are still very popular; despite much of publicity.
This feature article was written only for Bitrates with our regular assistant Stefan Stankovic.
Prior to this, everyone has even been easily linked to the financial world to hear about the fundraising process for Tranchar Buildings (ICO). In 2017, the introduction of more than $ 12.8 billion was started through ICOs all over the world and, if you think that is so big, you are surprised because this number has doubled in & # 39; first five months of this year.
The numbers could be very good, but the crypto cash-raising aspect is not as healthy as you may get the look by looking straight on the hotspots. numbers. According to the Statis Group report, 78% of the total number of ICOs in 2017 were marked as scams, and although only 11% of the funding was given to those ICOs – that is still equal to around $ 1.7 billion .
The lack of clear rules is defined by everyone in the cryptosphere as the main factor that helped reduce the route for major fraud and market management. However, this is not a long way to grow history; SEC of the US changes as future ICO markets with directions and warnings, but also with scores of awards. So do you want to fund the crypto project through ICO? You'll be better "look at yourself" with the SEC or wait for that hill – with a warrior – on your door.
The New Kid on the Block
The STO or Security Mark Procurement is the latest thing in the crypto fundraising business. In order to gain a better understanding of what exactly STO is, first of all, we will have the definition of two types of differences provided by ICOs: tokens utility and security tokens.
Tokens utility (also known as appliances or appliances) will be the future to represent a network, platform or company service path. These indicators do not represent a share of the company or promise to return to the investment in any form. Startups will fund the business endeavors by; creating utility tokens and selling them as "digital coupons" for the current platform, network or service that they are currently developing.
The reason why crypto businesses are choosing funding through grants of support rather than simple security locations: they are uncontrolled and can be sold for some Ether for anyone, anywhere. Ticket creators tend to show these shows as signal distribution events (TDEs) or genealogies (TGEs) so that they do not. participate in a resource donation.
Security papers, on the other hand, are supported by something visible such as property, profits or income; company. From a CSS perspective, if marks are marked on Howey's test, it will be considered a security converter. As simple as that. Security papers issued through the ICO are under the ownership of the SEC and an independent security is subject to the rules of federal and federal entities.
So, what is the difference between a regulated ICO and a STO?
STO is rewritten and ICO is regulated. ICOan's performance commenced its own STO call because ICO has been a corrupt word; As a result of the recent exposure in most of the negative indicators, it is a fraud; The first thing that is thinking about large investments.
The advantages and excursions of STOs
Before we find out what this means for choosing investors, we need a step back and we will consider that the three companies can freeze the volume from a. Record their money with the SEC: Reg A +, Reg D 506 (c), and Reg CF.
A registered STO with Reg A + can build up to $ 50 million and give SEC secured trusts to anyone over the age of 18 years of age. STO registration for Reg A + needs to be two years of registration; audited audit finances and going through a full-time and expensive administration process. STO can also filed for Reg D 506 (c) which is becoming easier and faster and more efficiently. allow capital companies to build up to a maximum limit; There is one big challenge – although they can not build capital from independent investors. Finally, Reg CF (short for Regulation Crowdfunding) enables STOs up to $ 1.07 million over a 12 month period from independent investors.
The three freedoms have advantages and disadvantages for signatories, but what do they mean for depositors?
STOs mean safety; A security-maker that receives security tokens through STO is protected by SEC regulatory standards. Indeed, there is a chargeable fee for this protection – investors need to go through the KYC and AML process and, in some cases, they will receive a certificate with the SEC.
There is no doubt that the protection of investors is far beyond the cryptosphere, but which of the so special ICOs is the opportunity that all investors have the opportunity to take part in & Despite what situation, age, situation or their jurisdiction. Investors / assistants should not have to register up to the individual platform, and # 39; Move some Ether from their bank and get the marks directly. The process is dangerous, but also rubbish, anonymous and inclusive.
The STO market is very young (its first STO was completed less than 2 years ago) and naturally there are some concerns – its compliance process in security grants is much more complex than with real donations and, compared to traditional trusts that have already established exchange and brokers, STOs have an appropriate and secure platform needs to direct their sales. It is said that STO is still better than IPOs because they offer more flexibility to business owners, and attract global investors and have lower obstacles for entry. In addition, digital signals can divide up to 18 decades that make the fundamental source of security much more transparent and accessible to some investors.
Is there a STO in the Building of Crypto Building Upcoming?
The STO offers negotiation between freedom of service and security phone and IPO legal certainty. And honestly, it would be fallacious if we were saying that its community is cryptic; value anything in addition to freedom and sovereignty, but at the end of the day we need to keep it right – there are rules here to protect the reservoirs, and investors need to win we should & # 39; see its & # 39; growing vegetation industry.
If investors are always scammed and handled, they will stop a & # 39; investment and, without this ongoing pump of new money – the entire business will disappear. Nobody – even the most who die hard, wants to see that. Right?
Bitrates would like to thank our host writer Stefan Stankovic for adding this article.
Absolute: information herein is provided without considering your personal situation, so it should not be defined as a financial advice, an investment proposal or offer, or an application for, business anywhere in the borders.