Security Token Offerings (STOs) have taken the crypto world by storm. Every crypto enthusiast including investors, business owners, and blockchain developers are finding STOs an attractive crowdfunding option.
Unlike ICOs (Initial Coin Offerings), STOs sell crypto tokens that represent a tangible asset. They have to comply with the SEC (Securities and Exchange Commission) regulations. STO investors are entitled to various rights including voting, profit sharing, and dividends.
STOs use smart contracts backed by blockchain technology to assert the rights of investors. You can trade these crypto tokens on a security token exchange platform. As a result, business owners and startups are trying to raise capital via regulated STOs.
However, the STO industry is still in its infancy with numerous gray areas. So, if you are going to launch your own STO to fund your business, you need to be careful.
Read on to know more.