STO (Security Token Offering) is a form of method that would allow the investors to buy digital coins or tokens as a part of a public offering. STO is the sale of tangible based securities related with assets or the profits/revenue of the start-up. They are needed to be registered with the (SEC) Securities and Exchange Commission. Due to which STO will be used by the projects that are much reasonable and serious about their goal.
What is ICO? How it is different from STO?
ICO is defined as the form of raising funds in a complete unregulated set of environment. In ICO fund is mostly raised into the crypto coins. Investor has no legal right and no voting right in most cases. Everything is depending on goodwill of ICO Team.
How STO is different from ICO?
As compare to ICO, STO works in a regulated environment under SEC (Securities and Exchange Commission).
- Tokens issued in STOs give investors some rights to the firm or organization issuing them.
- Fewer chances of scam as regulator oversight will cause fraud people to stay away.
- Fraudulent practices cannot be used by projects
In future STO will be used mostly by Genuine projects which will give investors a better way to invest.