Overview
An STO is essentially a blockchain-based version of an Initial Public Offering (IPO). Unlike ICOs, which often try to avoid being classified as securities, STOs embrace regulation from the start.
Key Characteristics
- Legal Compliance: Must be registered with regulatory bodies (e.g., SEC in the US).
- Investor Protection: Provides legal recourse for investors if the project fails or is fraudulent.
- Accredited Investors: Often restricted to individuals who meet certain wealth or income thresholds.
Impact
STOs are seen as a bridge between traditional capital markets and the blockchain industry.