Financial regulators and governments around the world have been warning citizens about the dangers of ICOs for years, yet the market has not herded toward Security Token Offerings and other alternatives until 2018. Will ICOs be replaced?
With all of the regulation and news of scamming in the ICO world, investors are looking for an alternative method to the ICO model, yet few fundraising models have proven to be more successful or accessible.
There is the Security Token Offering, which has been in headlines recently as countries such as Uzbekistan and Jamaica, and companies like tZero and Polymath make news.
Yet, many STOs are NOT GOOD right now because of the regulatory path that many are choosing to take in the USA right now — Reg D. The Reg D compliance path is popular because it allows smaller, private companies to sell stocks without registering as a security with the SEC. So it takes a fraction of the time and cost that an ICO does.
It’s bad because in order to participate in Reg D offerings, you need to be an Accredited Investor. It turns out that less than 7% of Americans can qualify to become an Accredited Investor due to the income and earning requirements.
So in order for more Americans to get into the security token market, the words of a 80-something year old security act need to change.
A more inclusive alternative to the STO, that is cheaper than the IPO, and less time consuming, is the Online Public Offering, or OPO.
Meet the Online Public Offering
The OPO, as seen on reputable sites like StartEngine, WeFunder, and SeedVest, is becoming a top choice as a crowdfunding vehicles by some of the newest and best companies.
This is especially the case in places like the USA where the regulation needed to become an ICO is extremely difficult if not impossible to undergo without infinite resources (e.g., time and money).
Although the OPO model has been around for just a few years, many investors still have not heard of it.
This is partially due to all the buzz that ICOs created, as well as the buzz from security tokens.
With so much uncertainty and fraud surrounding the ICO model, investors need a safer alternative so that they can put trust back into blockchain. It may not even be worth it to take the risk when you can access OPO platforms that are so easy to use and have all the data needed to invest. OPOs are just starting to flourish in the Crypto and Blockchain space and they are definitely worth your attention.