Replacing Initial Coin Offerings with Security Token Offerings

TALLINN, Estonia - March 23, 2020 - PRLog -- In the past few years, a huge boom has arisen over Initial Coin Offerings and while some of which have genuinely good offerings, the rest (most likely) remain either have erred or remain very problematic. This is also why solution providers all over the world started offering White label platforms to help businesses instantly create coin offerings. However, the problem persists in that ICOs have been, currently are and always will be connected to the word "scam". Actually, many other utility tokens are offered are securities and because of which, these are almost always termed to violate the securities laws in the United States of America. This is all changed during the 2017 ICO downfall, when the SEC released an official statement regarding certain tokens being eligible to be classed as securities and are therefore automatically and legally subjected to regulations by law.

In spite of SEC's note, most startups were still setting up their tokens as a utility which is mind-boggling. It is important to note that the SEC operates using the "substance over form" rule. This means that they look at each and every token according to how they are actually used, as opposed to the way they were intended to be used. Moreover, tokens from ICOs are expected to enhance their values within a specific amount of time, albeit only as speculation from the product development part since the coin supply always has a fixed number. This is exactly the reason why people buy ICO tokens, thinking it's a favorable form of investment without knowing all of the problems they'll face afterwards. Thus, to get rid of said problems, the idea of a more secure token offering was born.

Read more on: https://medium.com/fiatxs/replacing-icos-with-stos-8e16525fc8c2

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