Initial Coin Offerings or ICOs witnessed a staggering growth in 2017 as it turned into a multibillion-dollar market. However, the sharp rise was followed by an equally rapid downfall, owing to the unregulated nature of ICOs that led to an increasing number of scams.
According to TokenData, of the 902 ICOs floated in 2017, 142 failed at the funding stage while 276 failed over time. An additional 113 are now considered semi-failed as their teams have ceased all communication. In short, 59% of the 2017’s ICOs have either already failed or are nose-diving.
This downfall has been partly responsible for the rise of a more reliable alternative called Security Token Offerings or STOs. It is better because an STO falls under the federal securities laws governed by the Securities and Exchange Commission (SEC). In the US, an STO development company has to mandatorily follow is the Reg A+. It is a popular alternative for most STOs.
You can still see various crowdfunding sales sprouting all over the crypto market that may or may not be SEC-complaint. But, it is necessary to make sure that you are investing in an SEC-compliant STO.
Read on to know more, particularly about Reg A+ and STOs complying with it.