How to Raise Funds With a Compliant Token Offering (STO)?
Although security tokens aka. tokenized securities are not a new concept, blockchain technology is changing the industry. Therefore, it is no surprise that many fintech-based companies are looking to venture into the industry and launching security token offerings. Issuing a security token is faster, cheaper, and much more efficient than crowdfunding or an initial public offering (IPO). When compared to the fiat financial system, STO platforms will play the role Goldman Sachs did for fundraising or IPOs. Tokenization platforms could potentially be the future of digital finance, pushing forward worthy projects in the market.
Initial Public Offerings in the Token Economy
ICOs grew popular, and many blockchain projects were able to kick-off, owing to the massive success of their Initial Coin Offerings. These capital raising ventures provided an opportunity for investors and buyers to interact. However, ICOs posed a significant barrier in that they were not regulated. The lack of legal regulations provided an opportunity for scammers, and many crypto investors lost their money to ICO scams.
(STOs) were introduced to provide investor protection enabled by compliant blockchain technology. In STOs, the token created would meet the general definition of a security. What this means is that unlike utility tokens, security tokens are backed by an actual asset, which gives them an inherent value. Real-world assets such as real estate property, company shares, bonds, or commodities such as gold and oil, are fractionally divided and tokenized. Investors can then hold fractional pieces of the underlying asset through the security tokens. The legal aspect of STOs has attracted many crypto investors, who now look at security tokens as a valuable asset class in their portfolios. Security Token Offerings
The Liechtenstein legal framework is not limited to security token offerings but enables any token to be offered in a compliant way. These compliant token offerings include utility tokens, payment tokens, e-Money tokens (like stablecoins), or security tokens.
A Compliant and Regulated Security Token Expert
LCX, the Liechtenstein Cryptoassets Exchange, is a fast-growing industry leader in the blockchain and crypto world. This global fintech company is looking to create a financial ecosystem that bridges the gap between crypto and fiat. Through the LCX ecosystem, market participants from either market get to benefit from the explosive growth of cryptocurrencies and tokenized assets. LCX
The LCX Protocol requires that blockchains issue a dedicated permissioned token that must be approved by the LCX Regulator Service. Blockchain projects that would like to hold STOs can configure the Regulator Service to meet KYC Policies, AML requirements, tax laws, and other relevant securities regulations. As such, the protocol addresses the need for compliance, ensuring that the security tokens can be used for secondary transfers across various platforms.
Hollywood Producers Chose LCX For Their Security Token Offering
LCX acts as the exclusive trusted technology service provider in accordance with the Liechtenstein Blockchain laws. LCX maintains a Whitelist Database to validate decentralized transfers of the RVW Token. The Whitelist Database is a database stored on the data section of the RVW Token smart contract.
Your Ultimate Trusted Technology Service Provider
Undoubtedly, legal regulations play a significant role in token issuance. Now, any token issuers — whether utility or security tokens — must ensure that they comply with all the necessary regulations in place. LCX is a compliant trusted technology service provider for any token offering. LCX’s blockchain technology solutions allow companies to compliantly issue, transfer, and manage any form of token, from security tokens, utility tokens, or payment tokens. using blockchain technology.
Originally published at https://www.cryptofolds.com on December 30, 2020.
