STOs have become very popular over the last few years, and for a good reason. According to research results from Autonomous Research, the Initial Coin Offering activity has decreased by over 90% since the start of 2018. It all happened as a result of the pressure from the SEC, but also the number of fraudsters.
As such, STO came as a hero. It is a great response to ICO, and it is legal, considering the companies are SEC-registered. But what exactly made STOs so popular in the blockchain universe? If you want to launch an STO, you need to learn what makes them so great besides looking for lawyers for Security Token Offerings (STOs).
Check out this post to learn the benefits of STOs.
1. They Offer Transparency
Using STOs usually requires registration with the SEC. This can be very beneficial, because it can disclose some information about the company, like the financial results, management structure, and risks for investors.
Therefore, you have the possibility of analyzing the fairness and efficiency of the company issuing them.
2. There’s More Legitimacy
Many large companies are looking to make initial offerings. However, they are afraid of their government regulators, as they may see it illegal to raise funds using ICO. This is usually true, though. Most startups are not regulated, and ICO is generally a fraud and scam in these cases.
Meanwhile, fundraising using STO can be a much better deal. This is because SEC regulation is guaranteed. Therefore, after the initial placement’s completion, there will be no official coming to you and calling you a criminal, then asking you for large amounts of money.
SEC registration decreases the risk of a company being a fraud, which can be amazing for investors.
3. It Offers Global Market Access
It is very easy to purchase tokens, as all you have to do is go to the STO platform, register, and then transfer broadcasts, dollars, bitcoins, or other payment methods to those who initiated a crowdsale.
What’s even better is that anyone can do this, no matter where they are in the world, what time it is or what religion they are part of. The process comes with no limits, and it takes a few minutes too.
Therefore, any STOs target audience can include people from all across the globe, allowing initiators to obtain global market access without having to worry about extra conditions.
4. Being Able to Return/Recover
When it comes to cryptocurrencies, the downside is that if you somehow send them to the wrong wallet, you cannot recover them. But an STO that is programmed properly can offer you the chance to return or recover any tokens you’ve lost when the owner passed the verification and the tokens sold without the participation of the owner.
The Bottom Line
STOs are great for investors, so you may want to consider them. If you were unsure about them before, perhaps these advantages helped you change your mind.
