Security Token Offerings STOs are the new ICOs Malaysia

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Security Token Offerings STOs are the new ICOs Malaysia

By Crypto Soft Malaysia (30+ days ago)

With ICOs going through regulatory growing pains, with fraudulent feedback from the mainstream media and low success rate, we must strive to find more satisfactory means of funding blockchain development innovation that are more legitimate. The U.S. Securities and Exchange Commission (SEC) hearings are changing the future of how cryptocurrencies work at the intersection of more stringent regulations.

If blockchain startups can have more credible ICO's it doesn’t really matter what they are called. This also opens up the floodgates for companies and new projects in virtually any field to tap into how ICO's work backed by tangible assets. Would-be issuers of “utility” Cryptocurrency wallet tokens can be expected to encounter high costs, middling raises and regulatory risk. But there is a solution for the beginning ICO’s were magic.

Young projects without a legal entity, domicile or identifiable management team were able to raise millions of dollars. They promised to build infrastructure that would unseat corporate titans without so much as saying hello to regulators and taxing authorities. Smash the banks, change the world and bring about some sort of libertarian crypto utopia obviously that hasn’t happened.

Regulators are increasingly cracking down and taking interest in the blockchain space. While governments vary in their response to blockchain escrow systems projects, it is clear that they will respond and that they will hold projects accountable to their laws. “Utility” token offerings designed as an end run around securities laws are unlikely to hold up, with the SEC says openly that they haven’t seen a true “utility” yet. In this space, just about every project is likely in violation of securities laws.

Utility Token:
Utility tokens, also called user tokens or app coins, represent future access to a company’s product or service. The defining characteristic of utility tokens is that they are not designed as investments; if properly structured, this feature exempt’s utility tokens them from federal laws governing securities.

Security Token:
If a crypto token derives its value from an external, tradable asset, it is classified as a security token offering and becomes subject to federal securities regulations. Failure to abide by these regulations could result in costly penalties and could threaten to derail a project. However, if a startup meets all its regulatory obligations, the security token classification creates the potential for a wide variety of applications, the most promising of which is the ability to issue tokens that represent shares of company stock.

Strategic Coin is your go-to source for information about launching and participating in utility token ICOs. Whether you are a start-up or an existing business that desires to enlist the help of a professional utility token ICO smart contracts advisor or a token buyer who needs help navigating the blockchain space, Strategic Coin will provide you with the resources you need to take advantage of market opportunities within the crypto marketplace.

Security Token future:
Having said that security tokens have the potential to become the go-to form of funding for more established startups and for companies that want to tokenize their securities offering instead of listing shares on a stock exchange. Security ICOs will likely become a real competitor to traditional IPOs as the costs for an ICO remain cheaper and as more investors realize the advantages of digital tokens over “real shares”.

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Related Categories

blockchain development - Cryptocurrency wallet - escrow systems - security token offering - ICO smart contracts

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