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What is an ICO Security Token or STO ?

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A security token is a token that is sold to investors via one of the SEC regulations - Reg D, Reg S, Reg A+ and Reg CF are good examples. A Registered S-1 IPO is another route. This type of ICO is also called a Securities Token Offering or STO.

It is important to note that a token that is a security is not required to have the same characteristics as a share of stock. When you define your token security, it is your choice what the rights are that you assign to your tokens. So things like ownership rights, profits, dividends and preferences that are often assigned to share ownership may or may not be part of your token security.

Other terms used to describe tokens that are issued to investors via SEC regulations are; SEC compliant ICO, regulation compliant ICO.

 

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