According to Nasdaq analytics, security token offerings will be set on central stage in 2019. Moreover, STOs are projected to have a market cap of $10 trillion in 2020.
But what is actually an STO?
Security Tokens and STOs will allow any company to offer equity, debt or dividends in form of tokens. A project does not need to have large assets to attract investors - since any asset can be tokenized, offered and sold, and any asset can serve as a guaranty itself.
Main advantages of tokenization are: fractionalization of larger assets, an increase of liquidity, lower intermediary fees and better market efficiency. However, the greatest benefit that security tokens provide an issuer is access to a global pool of capital. As these tokens can be sold and traded internationally (when compliant with regulations), they become more fairly priced and, therefore, attractive to investors.
Attractive to large investors
STO offers more security for promising, solvent investors, who are not looking for risky projects. STO as a SEC compliant offering is appealing to both institutional investors for it’s more recognizable structure, and to crypto investors for its technological innovation.
Minimizes non-compliance risks
Governments have never been particularly friendly towards ordinary ICO. Now states are becoming more persistent in keeping an eye on ‘ageing’ ICO funding. STO, on the contrary, offers clear compliance techniques, well-treated by most jurisdictions worldwide.
Satisfies new age investors’ demands
More and more investors are no longer satisfied by what ordinary ICO offers them in return for their funds. STO possibilities, such as voting for project’s decisions, dividends, etc, have endless perspectives for satisfying this increasing investors’ demand.
Dependent on the needs of your business our team will structure your STO compliant to all the necessary legal requirements. Services:
- Formation of a corporate structure for the STO
- Determination of the appropriate token structure
- Structuring a model of STO that complies with the securities legislation
- Preparation of offering documents (investment agreements, private placement memorandum etc.)
- Audit of smart-contracts
- Legal support for compliance with KYC/AML requirements
- Post-STO support