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Guys, what's the difference between STO and ICO? STO - security token offering. Some say that STO has other legal consequences, in contrast to ICO. Security token becomes like a stock share, unlike a token issued on ICO. Is it right? What do you know or think about it? Personally, my opinion is that STO does not differ from the ICO.

Hi there. In essence, both STO and ICO are capital mobilization from the investors. But when it comes to "token", "ICO" is mobilizing capital through the sale of "utility token", while the STO is mobilizing capital through the sale of "security token".

The nature of 2 "token" is different:

Utility tokens can be created by anyone and are not subject to legal constraints. When the issuer of the token goes bankrupt or scam, the biggest loss is to the investor.

In contrast, the security token is bound to the publisher's assets and is governed by the law. When the issuer declares bankruptcy or commits fraud, they must liquidate all assets associated with the security token and return it to the investor as a percentage of the token they hold (like stock). At the same time, they are subject to legal action if they abuse their tokens. So investors will be protected when investing in security token.

That's all my opion.

Security token offering (STO) enables company to create token value from an external trad-able asset. ICO's has recently used to raise funds by offering virtual coins / tokens to investors. ICOs are similar in nature of crowdfunding. Crowdfunding are usually considered donations where as investor of ICOs gets returns on investments.

STO is actually a new, improved version of the ICO. It has been made due to the large number of ICO scams in recent times. The main difference is that STO investors become a full co-owner of the project that will allow you to save your money in any case.

STO comes with legal accordance and hence the team/project/company seems to be more dedicated and the project has larger chances of success which brings larger profit to the investors. People can easily sue STO's for fraud in worst case scenario.

The main difference between STO and ICO is the type of token they are offering. STO allows customers to buy tokens as part of a public offering, similar to what a ICO does. But, these STO tokens are backed by a tangible element, such as assets, profits or even revenue in a company. It is more like holding shares of a company just in a different way

In feel way out of the loop as I have never even heard of a STO!

ICO (Initial coin offering), TGE (Token generation event), STO (Security token offering), etc. All this definitions are non official and mean Token Sale. Change of title it is marketing.

No, it's not the same thing. ICO is a type of decentralized crowdfunding system that can offer either security or utility tokens, so basically STO is a type if ICOs. Security tokens are prohibited by the US SEC (because most of them don't comply with the laws of security), these are the kind of tokens that pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits for the token holders (examples: tZERO, Polymath). Utility tokens, on the other hand, aren't prohibited by the SEC, but you have to follow their regulations (that's the kind of tokens you are most likely familiar with, like Ether).

STO  or ICO  both of them are capital mobilization from the investors. STO allow customer to create token value from and eternal trad-able asset and also buy tokens as part of a public offering, ICO is also mobilizing capital through the sale of utility token.

Difference is between their token I thin one’s provide utility token and another is security token.

The difference between STO and ICO is the token they are offering. STO allows customers to buy tokens as a public offering, just like an ICO. But, STO tokens are backed by a tangible elements, such as assets, gold, shares of an organization.

these both are different thing I guess ICO has better position in the market so will most of the users will suggest you to invest on it but I will say first analyzed the market then decided where you want to invest. taking suggestions from others is not always a wise move

In the crypto market, as far as I know, Security Token Offering or STO is just a hotcake for now which is not ever swallowed as this concept has launched but there is not any STO in crypto space. If there is I would like to know, please! And ICOs are very known in the market and come up with legitimate, fake, scam and famous tokens. STO may be possible when a govt. launches any.

absolutely agree with you mate
this is just a kind of marketing strategy, just a different words but has the same meaning

I think the Security Token offer is like ICO. But STO works like stock shares. I think that there is no such difference as these two are near. Both are very promising and safe.

STO is like holding stocks of a company and are more secure than holding ICO tokens. Launching an ICO is comparatively easier than launching STO since it has to follow some legal constraints. If ICO companies goes bankrupt then it doesn't have to compensate the investors but STOs that declare bankruptcy must liquidate the remaining assets to pay back the investors.

Well either way they have the same concept of using decentralized tokens, That you can earn from an investing through the companies itself, Well the only thing STO might be secure because of the need of compliance to the law of its security, But then again as you have said most of them don't really comply to that term and ending up a fraud, Well I am not quite familiar with STO, I am just elaborating what you have just explain here and would keep track if there is a need for security tokens, But I might say I still like ICO even though there are some of them ending up running with the investors money or ending up creating shit tokens instead.

I was hearing many thought about that ICO needs to be regulated in order to become more secure and less opportunities to scam people using it, so possibly it is a way to perform that, and it is mandatory...

That's right, the developer tries to create such a marketing trick through use TGE and they said that it can't be called as security because those investors are giving their money as charity and that's a joke man.

STO tokens are more like buying share of a company being backed up by tangible assets. It is definitely more secure than ICO as there can be case of fraudulent ICOs who might run away with investor's money because their tokens are not backed by anything tangible. However, both have their pros and cons. Personally, I prefer STOs.

These are slightly different from each other. ICO put together the capital through the sale of utility tokens, on the other hand STO do this through the sale of security tokens.

"It is a strong assumption that in the second half of 2018 and in 2019 we will
see a huge increase in STO, which may cause the complete disappearance
of ICO. The reason is simple - greater certainty for potential investors, and
hence a lower chance of fraud. STO is a natural bridge between the
traditional finance sector and the blockchain, benefiting from both spheres.
"

Most people just sum all coin/token offerings as "ICOs" but there are some different laws / regulation on the use of the terms. That's mainly why ICOs are called things like STOs and etc

Both are good but you should choose a right project . Just think of the future man, chose a wise decision.

My opinion most of the guys are in unfamiliar with sto right now, so there is some amount of time needed in order to get involved and really familiar with those differences between ICO and STO

Security Token :)

STO is the new hype, The idea of STO came to light by a blockchain startup called Polymath headed by Trevor Koverko. The concept is gaining much traction as it more regulated which is the main issue with the ICOs.

Read here more about  STO vs ICO  (https://101blockchains.com/sto-vs-ico-the-difference/)

Tokenized securities are more trustworthy for sure.

A brief intro to tokenisation of alternative investments
https://highcastle.co/how-to-win-in-token-madness/

In fact there is only one thing similar between STOs (http://stoscope.com/stos) and ICOs and it is blockchain in the base. But all the other things are completely different.

STO is a kind of ICO, but STO is clearer, has been guaranteed by law, STO guarantees investors by binding them to take a position where the direction of the project, so investors and companies will jointly build the project

No wonder these developers are picking ICO than STO because it's safer and there's not much obligation on their part, so do you think next itme it's much better to invest on security-based token then utility token because you are protected by the laws.

Although I mostly invest in ICOs, I think STO is good too and more secure than ICO since security tokens (STO) are subject to such law.

These are just different formulations of the same concept. ICO - Initial coin offering, STO - SECURITY-TOKENS offereing. And security tokens are coins, lol. Just marketing.

STO is the Security Token Offering, same as ICO, but raise the funds using the token with security.

Pros of Security Token Offering:

• Naturally More Secure
• Greater adaptability for business owners
• A smart contract can robotically observe, follow, and allocate investment fund
• Shrink the investment threshold.
• Increasing the asset liquidity
• Market efficiency has been improved.


Get a free consultation to launch an STO (https://www.icoclone.com)

People thinks that but I know sto is waves based if I didn't see wrong, I don't like waves and I don't invest to nothing related with waves and eth gives me confidence so I choose icos again.

With ICOs, you, most likely, invest in a non-existing product on a non-existing blockchain that is about to wow everybody in the near future.

With STOs, you put your money in an existing product that had been tokenized and legalized before.

It is a simple as that!

If we consider these two positions, then I choose first of all security. But the main thing is the ability to reduce the number of fraudsters in the cryptocurrency market, and I'm also interested in the real interest of STO in the Bounty company.

STOs will make the crypto world more reliable, unlike the ICOs that are not under any regulations and decide to quit their project at any point in time.
Well, the potential issues investors could face is that they will be faced to pay indirect taxes which shouldn't be a big task to do.

Is it true that in STOs only accredited investors can take part? Because if so, it leaves a big amount of the population uninvolved.

To me personally sto or ico
There are no differences at all
I see them as a packaged tag given to confuse and dilute the initial thoughts of investor
Mi have seen sto project lie and elope
Just as ico would do

STO tokens are nothing more than shares of this or that company. Legislation of many countries prohibit the transfer of the tradable type of tokens without a fee for them,
this will significantly increase the threshold in turn in the STO and in the bounty. However, it will significantly increase the security of fundraising, and some stability in the future.

STO looks and has more chances of success than ICO and maybe in the future or this year, we will see a lot of STO coming in the market in exchange for ICO but I don't know if they can still integrate bounty hunting in case, just check out DESICO after shifting from ICO to STO they refused to pay bounty hunters.

STO tries to create tokens that are more realibe with the current world we are living in, where governments control the world and laws are created by them so it kind of changes the whole idea of cryptocurrencies since STO tokens can be easily legalized and governed by the laws. Of course the succes rate of STO could be higher since you are buying a token that is already accepted by multiple countries and can be used based on a set of laws, but as I said I see this as something different from ICO tokens since the whole idea of cryptocurrency is broken and the rules are changed.

Based on what I read on this thread, it looks like STO is a good option for investors compare to any ICO that usually became scam later but I am wondering since STO offer a security token does the team members must verify their identity before launching STO?

They are not even registered before creating STO, basically STO just another rebrand and no more differences with ICOs. What will be the differences of STO with ICO if the team not yet registered or verify its identity to the government? Some icos have registered its company to the government and it has been getting no action letter and that means if ico can operate legally in such country just like canada. Basically those idiots team must understand about how the regulation work. Government has issued a lot of legal framework and if you do that you will be fine. If you are re-branding your ico and you don't care about the legal framework and that is the same whatever you have called it as STO or ICO.

The STO is circulating because of the too many scam ICO going on, I don't know the structure of STO in terms of bounty hunting or promoting through bounty hunters because I read one STO DESICO refused to pay their bounty hunters because they shifted from ICO to STO.

STO has less chance of having scumbag dev teams. But what if they are registered in Estonia or some unknown country? Now, that's another problem. It is easy to runaway if you are registered in a faraway place where nobody knows it exists in the first place. So just do your own due diligence before becoming a prey animal of these projects.

I am also interested in this question. As I understand it, STO differs from ICO in that STO makes everyone go through the verification procedure, that is, there is absolutely no data at all.

STO has got some potentials, but for now, since one is still very new to it and that the concept needs to first be well understood, i would still go for ICO tgay i have always been used to.

STO is more better now I think compared to the ICO. Maybe this year STO will become more popular and maybe the ICO only left will choose that because I will not worth it because a lot of ICO are scam so many people are tired to invest now to ICO and this year will be better.

STO will definitely be the hotrend in 2019. I have read a lot of articles and there are many current projects that have applied STO instead of ICO, Simply, STO can protect investors' rights and money. , avoid being scammed like ICO

I guess so, we will not anymore see a lot of popping ICOs because most of them will fail with this new trend of crowdfunding.
The team will be more careful not to violate any law, otherwise their project will fail early, I also think that they need to comply in every requirement by the government because I've see some security tokens that are still not listed in exchanges until now.

This kind of investment requires investors to be patient as they go on with the process but the security is high, so they don't need to panic, the old trend was, when the ICO is over, it can easily be listed in exchanges because investors are pushing the team to make it happen quickly.

Agree with you. I think also that and STO is new game. It's only an other version of ICO. But it can become a new trend in 2019.

STO is just repeating the game of ICO in the past. STO may conform to the legal framework, but whether it has potential or not, I am not sure. Maybe people will not believe in STO after they have experienced the lessons of ICO failure.

In that case, STO might be even better to replace ICO's nowadays. In order for the market to avoid scams, it should be utilize and promoted by bounty hunters instead of such fraudulent ICO's just reaching their desired cap and disappear.

Securities needs to be really vetted well as well. I mean I am not an expert on this subject so I am quite new and don't know the details but unfortunately we are in crypto and I am afraid if STO gets bigger and ICO starts to go away some coins may come up saying they are STO and securities and so forth and that would make some newbies like me to invest into it whereas they are nothing just a scam and have no registration anywhere at all.

I think instead of looking at the way coins are trying to get funded, it is more reasonable to look at the team, look at what other coins this team created before and see how they fared before. If there is couple of guys together that previously did all kinds of difference coins combined on their CV that gives me more trust than anything STO or ICO honestly.

For some reason it has become fashionable to say exactly STO, but have you seen what demands are being made there? I think that this is clearly not about us. Let them collect such coins themselves, it seems to me that today I vote for ICO

ICO is currently dying, and a large number of projects will not succeed. So STO may change the status quo of cryptocurrencies. But this product takes a long time. Investors must wait patiently.

If you dive into the details, then in general the STO process looks very similar to an IPO, but of course it is more in the format of a cryptocurrency environment. But again, the ICO process is a crowdfunding process these processes should not be confused.