What is Security Token Offering (STO)?
💥💥[Complete Guide]💥💥
Part 6
Is it Security or the Utility Token: XRP Case
The SEC and FINMA have broken down tokens into two broad categories: Utility tokens and Security tokens.
Because most of the ICOs are investment opportunities in the company itself, most tokens qualify as securities.
However, if the token doesn’t qualify according to the Howey test (a test which will be used to determine whether a certain transaction is an investment contract or not), then it classifies as utility tokens. These tokens simply provide users with a product and/or service.
🔹 STOs as an alternative to utility token offerings combine the reliability of traditional finance with the versatility of crypto. Aside from being a more secure way to prove equity ownership, blockchain and now STOs are already beginning to overhaul financial systems as we know them
🔹 The words “utility token” have acquired a sour taste, and for good reason. Over the past year, it has been badly misused by ICOs in search of easy money.
🔹The fallacy, as SEC officials have made clear since 2016, is that almost every case the “utility” is on a non-existent platform.
Read full guide
👉 https://www.coinspeaker.com/guides/security-token-offering-sto-complete-guide/
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