StOs will take over ICOs

Security Token Offerings (STO) will replace ICOs
The ICO market was again particularly strong in 2018. This may change as a result of recent regulatory developments. The cryptocurrency industry has developed towards the so-called Security Token Offering (STO).

Content

1. ICO's regulators are taking action

2. Security tokens and auxiliary token differences

3. Overstock supports SEC compliant ICO alternative

4. Polymath supports security token offer (STO)

5. STO conclusion

ICO's regulators are taking action
According to the financial research firm Autonomous Next, about 9.8 million dollars have been raised through ICOs since 2016. This cash flow has attracted the attention of the Securities and Exchange Commission (SEC). The stock market supervision was established after the big stock market crash of 1929 to protect investors. The Commission has long been investigating whether ICOs are legal and regulate the use of digital currencies.

The SEC warns against so-called pump-and-dump systems in ICOs. According to Business Insider, only 48% of ICOs were successful. Earlier this year, one of the largest ICOs of all time was closed to the SEC.

The Securities and Exchange Commission allows certain subpoenas to be directed to a number of companies and individuals engaged in initial coin offerings.

Security tokens and utility tokens differences
Tokens can not only have different properties. The biggest criticism of the SEC concerning ICOs is that the tokens have no security features. Than the mosts Token providers known as utility tokens or utility tokens. Basic knowledge can subdivide tokens into two categories:

Utility tokens
Security Token

The security token is supported by external, tradable assets. One of the main applications is that they give companies the ability to issue tokens that are comparable to company stock. These tokens are subject to securities regulations. This point is particularly important for the SEC and other regulators.

A utility token, on the other hand, provides the buyer with future access to a company's product or service. It is not meant to be an investment in principle.

The biggest difference between the utility and the security token is that the owner of the security token has ownership rights. The Utility Token Owner has no rights or interest in the platform or the assets of the Company.

Overstock advocates SEC-compliant ICO alternative
Overstock CEO Patrick Byrne has long been a proponent of cryptocurrency. He has positioned Overstock as a leader in the crypto market. Overstock was one of the first large companies to accept cryptocurrencies. Eventually, Overstock became the first public company to issue and trade shares in a blockchain.

Byrne has argued for a way to make the ICOs safer and, above all, compliant with SEC requirements. Their alternative proposal to the previous ICO is therefore a Security Token Offering (STO).

Investors can also buy in a security token offering coins or tokens. But unlike many ICOs, these tokens must be supported by something tangible, such as the company's assets, profits, or revenues. They are almost exactly like a company participation, with the difference that a token is "programmable".
Polymath supports Security Token Offering (STO)
According to estimates for the year 2020, the security token offering is projected to have a market capitalization of $ 10 trillion. Polymath, led by Trevor Koverko, wants to act as a catalyst for the security token offering. It offers support with the publication of security token offering with its Polymath platform.

A comprehensive range of services is provided. From legal issues in different countries to the technological process, companies receive advice and support here. The approved tokens should also meet KYC / AML (Know Your Customer / Anti-Money Laundering) requirements and securities laws. The ERC-20 interface for tokens can not do this. Polymath has thus created a security token standard protocol called ST-20 and uses Smart Contracts.

STO conclusion
The SEC's actions and bans in various countries had hit the ICO market hard. It is therefore expected that companies will switch to the security token offering in the future. Because the security tokens can be compared to securities. They meet the requirements of regulatory authorities and are thus legally the safe solution.

Be one of the first people to get knowledgeable about STOs:

Polymath
https://polymath.network

preflogic
https://preflogic.com

tZero
https://www.tzero.com

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