What's the fuzz all about? are ICO's/STO's any different? - page 2.

When ICOs first came to be, the community surrounding it turned a blind eye to security regulations that where currently set in place, thinking they would be able to bypass such laws. After regulations came knocking on the doors of such ICOs a "new" wave of collecting funds started to appear late of 2018 known as STO's, which promises to provide a more secure way of raising funds while minimizing the risk of investors.

Are STO's all they are set out to be?
The answer you will find is no, through all the hype around STO's one has to be reminded that both a STO and ICO are completely the same.
To gain a better understanding you will have to ask yourself the following questions.

1. What are Securities?
In most countries around the world you will come to find that securities are tradable financial assets.

2.What are the regulations for securities?
Each country has different regulations set in place, some have strict regulations set in place from KYC to the restriction of only wealthy investors being able to trade financial assets.
On the other hand there are just some countries who simply do not care to have regulations set in place.

After having obtained the answer of these two questions one can come to the conclusion that both an ICO/STO are to be considered a security dependent on the country in which the project is established in.
Just because a project claims to be a STO does not mean that you can safely invest in it.

So here comes the third question to be asked.

3. Is there protection against fraud in the country in which the project is established in?

Some investors may prefer to invest in projects in which are established in a country with minor security regulations, if so one must be aware of any laws against consumer fraud. Are you as a investor able to hold the project responsible in the case of which they decide to simply run of with your money?
You better make sure there is, an example being St Kitts and Nevis in which there are minor security laws but still enforcement set in place against consumer fraud.

Conclusion
When considering to invest in a STO make sure to inform yourself on current security regulations in the country in which it is established in as not all countries have well established security laws and for those that do most do not allow common folks to invest in such security offerings such as the U.S. On top of being informed of security regulations in such country make sure that there are laws in place that have consumer fraud enforcement set in place to protect your investment in the case of any wrong doing.

STO's and ICO's are the same, do not be fooled just because a project states to be a STO.

Update:

It seems as even though both a ICO and a STO are both securities it seems as one is stricter than the other, STO's are to be traded on a ATS or through a broker only thus not having a cryptocurrency like function as it is not free to trade.

Read more below.

https://bitcointalksearch.org/topic/stos-are-not-cryptocurrencys-5114978

Topic: What's the fuzz all about? are ICO's/STO's any different? - page 2. (Read 256 times)