Defining Security Token Offerings
By: Gow Exchange
Tags: Philippines, Sto, Bitcoin, Fintech, Blockchain

What are STO’s?

The shift towards crypto has always been about two things: disrupting and offering an alternative. GOW has been facilitating this through its overseas remittance schemes, its full-suite of EPoS services, and its stablecoin ledger solution — — all through our FinTech as a service scheme (more on that to be announced later).

When we visited the Hong Kong Blockchain week last week, one of the most common and contentious topics was the advent of STO’s and the regulatory and compliance hurdles that may be encountered along the way.

Though Security Token Offerings have been gathering steam and garnering much interest, they largely exist within the conceptual realm and have yet to be clearly defined within any national legal framework.

On the basis of the information that is currently available, here is our overview of what security tokens are and how they may potentially be integrated into the crypto sphere.

Defining Definitions

The simple definition of an STO is ICO + Regulation = STO. This largely stems from whether ICO’s could be defined as securities or utilities, with jurisdictions like the Philippines (where GOW is licensed and regulated) enacting legislation that assumes that all ICO’s are securities unless proven otherwise.

The argument is regularly made that they are products as opposed to securities, but let’s get real for a moment: They exist by and large with the purpose of raising money and then being flipped over on global unregulated exchanges.

The result of this was a series of scams that ripped off investors and brought the crypto industry into disrepute.

The Secure Way Forward

While regulators are still scratching their heads and trying to figure out a suitable mechanism for brining order to the crypto space, industry-led initiatives have been offerings solutions to this perennial issue.

The way in which STO’s are set up isn’t much different to a traditional stock or an Initial Public Offering. You have shareholder rights and voting obligations within that particular ‘security’. When you are investing in an STO, the security you are investing in is backed by something tangible. This adds on an additional layer of safety that gives projects access to 24/7 capital and universally transferrable products, while giving consumers lower costs and knowing that the party overseeing the STO is accountable, removing the previous concern that existed with ICO ventures.

This also fixes the problem that exists with traditional stocks, in that security tokens are easily transferrable and shares can be transferred by the click of a button.

Will GOW be listing STO’s?

Yes!

GOW has a strict onboarding process for all our token listings. Given that we are licensed by the Philippines Central Bank, Bangko Sentral ng Pilipinas and the Securities and Exchange Commission, we hold ourselves to the strictest of regulatory standards.

Customers are also required to go through KYC and AML procedures, which allows us to uphold and maintain the integrity of our system.

We have exciting news coming up on this soon, so be sure to say tuned!