The Importance of Security in ICO Markets

mobu (25)in #ico • 6 years ago

As blockchain technology and Cryptocurrencies have changed the fundamental way of transacting money, ICOs have changed how companies and organizations now raise funds for themselves. By offering tokens for a price far lower than expected price in the market, firms in the blockchain sector easily raise money for their work and buyers get a chance to make profit off the future rise in token value.

The tokens distributed are backed by whitepapers which explain and claim why and how the project provides value, is valid, and thus why the value is expected to rise. This is just like a security released by a company, giving it the same characteristics — a tradable financial asset that gives the company in question money as an investment.

What Differs In The Market

Tokens offered by most companies have one major flaw: They are not declaring a stake or share in the company. The tokens’ rise or fall of value will have no effect on the funds raised. Essentially, the tokens become an asset that is no longer bind to the parent company in terms of the holder wanting the investment back (and the profit made) from the distributor.

The shroud of confusion over security tokens is worsened with legal compliances not being met, since the tokens are not shares per se and there are conflicting rulings from bodies all over the world.

How is MOBU Helping

MOBU understands that there are companies who wish to launch tokens as proper securities, in full compliance that reflect their traditional counterparts. Their platform, by offering a one-stop solution for compliances both from ICO organiser and buyer angles, gives a massive boost of confidence. Security tokens launched from it have the same legal workings and structure as paper based tradable shares, creating much more trust and setting the scene for institutional investment.

The platform, through smart contracts, ensures that any and all legal requirements for security tokens are met when launched, including backed by actual assets. Through this, MOBU offers developers and token launchers an ease of mind if they are unsure about what regulations to follow when offering security tokens to the crypto community.

Taking on the issue from the buyer side, the platform gives confidence to investors that the security tokens they are buying is compliant with current regulations covering the sale of regular securities, giving the digital tokens the same standing as their traditional counterparts.