This form of crowdfunding creates a safer investment climate for potential investors.
Security token offerings sec.
If you take an existing asset and wrap it in a token it is a tokenized security.
A security token offering sto tokenized ipo is a type of public offering in which tokenized digital securities known as security tokens are sold in cryptocurrency exchanges or security token exchanges tokens can be used to trade real financial assets such as equities and fixed income and use a blockchain virtual ledger system to store and validate token transactions.
As sec chairman jay clayton has stated tokens and offerings that feature and market the potential for profits based on the entrepreneurial or managerial efforts of others contain the hallmarks of a security under u s.
As well blockchain tokens can be traded in secondary markets making them far more flexible.
Security token offerings stos share similarities with both initial coin offerings icos and traditional securities.
Basically if you issued a new financial product with security features it is a security token.
Primarily security token offerings open access to private investing a previously exclusive club.
Despite a similar appearance and terminology issuing.