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SECURITY TOKEN
OFFERING STO

As one of the few, we offer comprehensive support
for Security Token Offering (STO) projects.

If you want to develop your business, gaining investors is essential. The Security Token Offering (STO) has become to the cryptocurrency world what the Initial Public Offering (IPO) is in traditional stock exchanges. Although it is still considered a new solution and is not as popular as Initial Coin Offering (ICO), the popularity of Security Token Offering (STO) continues to grow. More and more entrepreneurs are interested in offering to sell security tokens. Thanks to their international experience and knowledge, Thompson&Stein is one of the few law firms to offer comprehensive support for Security Token Offering (STO) projects.

What is Security Token Offering (STO)?

Security Token Offering (STO) is considered to be a secure way of issuing tokens due to higher requirements for issuers and thus lower risk of abuse. Security Token Offering (STO) issues tokens based on specific assets, such as shares or stocks in a company, which is why STO is often treated as the equivalent of a traditional Initial Public Offering (IPO); however, in the world of virtual currencies.

Security Token Offering (STO)
– who is it for?

Security Token Offering (STO) is an attractive solution for investors who value security and similarity to traditional investments. The STO must be issued by commercial companies in compliance with regulations applicable to securities. This entails additional costs but makes the whole project safer. The number of Security Token Offering (STO) issuers is smaller compared to ICO issuers.

Security Token Offering (STO) – how does it differ from ICOs and IPOs?

Security Token Offering (STO) is accepted as an alternative to the Initial Coin Offering (ICO) and as the virtual currency market’s counterpart to the Initial Public Offering (IPO). The ICO carries a higher risk of fraud, while with the Security Token Offering (STO), funds are backed by actual assets.

IPO

is conducted by businesses that have a defined and verified performance record

is subject to supervision and regulated guidelines

shareholders are guaranteed dividends

ICO

organised by start-ups, rarely with equity capital

lack of a fully regulated legal environment

based on a potential return on investment in the future

STO

conducted by investors registered as brokers, exchanges, dealers

linked to registered financial assets

subject to a number of regulations

How to conduct
a Security Token Offering (STO)?

Before conducting a Security Token Offering (STO) project, you need to analyse the market to see if your project is likely to succeed. Conducting a security token offering also requires knowledge of the STO preparation process and expertise on technology and legal and tax systems to which the issuance will be subject. The same legal regulations that apply to a traditional securities offering also apply to a Security Token Offering (STO). After a market analysis and verification of all legal and tax requirements have been carried out, the president of the company and the members who will carry out the specified activities are appointed. Next, a smart contract is built, a Whitepaper is prepared, and a platform is selected to issue the token.

With the Security Token Offering (STO), a number of procedures must also be implemented, including KYC and AML, which is a legal requirement in most jurisdictions. In EU states, you can conduct either a private offering (less formalised) or a public offering (more formalised and costly).

Due to its complex organisational, legal, and tax nature, the Security Token Offering (STO) project is too complicated for many businesses, and its implementation is an insurmountable barrier.

Before launching a Security Token Offering (STO) project, it is worth taking advantage of the advisory services of the specialists at Thompson&Stein, who have the knowledge and international experience gained in the implementation of many such projects. That way you increase the chances of success of your project at every stage.

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