Replacing Initial Coin Offerings with Security Token Offerings
By: FIAT Exchange
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/
Stay updated with our latest news: