ICO Alert
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ICO Alert

Why Security Token Offerings Could Be the Next Big Crypto Megatrend

The ICO Boom

What is the Difference Between a Securities Token and a Utility Token?

How Do We Actually Distinguish Between Security and Utility Token Sales?

  • The user is investing money (however, later cases have expanded this to include the investment of assets)
  • The user expects to profit from the investment
  • The investment is in a ‘common enterprise’ (this term has not been precisely defined. Many courts have used different interpretations)
  • Any profit comes from the efforts of a third-party or promoter (if an investor’s actions have a large influence on whether or not the investment will be profitable, it is likely that the token will not be classed as a security)

The Current Problem With ICOs

“I believe every ICO I’ve seen is a security” — Jay Clayton, Securities and Exchange Commission chairman.

The Benefits of A Security Token Structure

Only Accredited Investors Can Invest in Private Securities Offerings

  • An annual income of over $200,000 individually, or $300,000 with a spouse, maintained over the previous two years and with the same expectation for the current year.
  • Net assets worth upwards of $1 million, excluding the primary residence (unless more is owed on the mortgage than the residence is worth).
  • An institution with over $5 million in assets — e.g. a venture fund or trust.
  • An entity made up entirely of accredited investors.

Upcoming Security Token Projects

Overstock’s Security Tokens Exchange

Overstock Links Up With Kodak

“The KODAKCoin offering is centered around providing photographers security and peace of mind, and the tZERO platform allows us to provide that same security to our token holders as well.” — Jan Denecke, Co-Founder of the KODAKOne platform and KODAKCoin.

Polymath is the First Ever Security Token Launch Pad

“Currently, there are up to 10 new tokens launching every day and many of them will be deemed securities. The companies launching these tokens need access to investor capital and assistance in navigating the complex legal and technical functions of Initial Coin Offerings (ICOs), and their regulatory requirements. Polymath is guiding traditional financial companies like VC funds, Private Equity firms, and Real Investment Investment Trusts through a securities token generation process by automating key functions for them.” — Trevor Koverko, Polymath CEO

2017 Was the Year of the ICO, 2018 Could Be the Year of Securities…

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