Topic: ICO vs STO (Read 147 times)

STOs provide transparency, and investors are provided with equity, so they have actual value for their Investments. This does not mean that all ICOs are scams or failed projects. ICOs are a major part of the cryptocurrency ecosystem and supports new tech and growth of upstarts. Not all projects can offer equity, and digital technology has so much utility, that makes ICOs necessary. Hopefully, both sectors would function together.

People don't want to invest in ICO at all because of too much scammer. STO were here to protect all the investors money. You were correct STO is a little bit expensive but more secured than ICO.

The trend is now the IEO, look at how recent children of binance make IEO. The ICO will not die but it has evolved into an IEO

All of us, who is involved in crypto business, know that there is a new way of fundraising in crypto world, called STO (Security Token Offering). The idea of using STO in crypto appeared after many problems, related to ICO scams. Frankly speaking 98% of ICO's created in 2017-2019 were scams, or just failed projects, because nobody was interested in investing. Scammers (especially from Russia, Lithuania, Ukraine, India) entered ICO marked very quickly after understanding, that nobody will follow them and there will be no punishment for stealing peoples money using ICO. Thanks to super easy nature of creating ICOs on Ethereum and other platforms, making a scam crypto project became very easy (I wrote about that not a long time ago here https://bitcointalksearch.org/topic/m.40161113 )  Also ICO's attracted a whole bunch of lazy idiots chasing a goldrush and throwing millions into ICOs without checking them properly. Scammers used fake pictures (stolen identities) and copied whitepapers from another projects. By the end of 2018 it became very clear that something should be changed for protecting investors from scam ICO's and STO appeared to be a good instrument for that. STO Security Token Offering is almost the same as ICO but unlike an ICO, STO a security token offering is a investment contract into assets, like stocks, bonds, e.t.c.. You can read more about that here https://cointelegraph.com/explained/what-is-an-sto-explained

Now let me make it understandable in simple way.
1. When you are investing in STO, KYC process is required (Creators of STO and investors,have to be identified) This clearly will protect investors from fake teams and you will know who took your money.
2. STO must be always backed by some form of tangible assets. This will be some kind of Escrow.
3. STOs are classed as securities and it requires official registration the country they are launched in. (SEC, FCA, e.t.c..)
4. Launching an STO is very expensive and scammers will not afford it.

All this is OK, but the problem is that STO is not anonymous at all this opposes to so called financial freedom which is the main part of crypto ideology. Also many investors will not like to identify themselves and also only few real crypto companies will afford launching STO because it is very expansive.