ICOs and STOs are both used by individuals and companies for fundraising, and both use blockchain technology. ICOs developed first and basically allow anyone anywhere in the world to launch a project by offering tokens in exchange for investor funds or crypto payments. STOs are basically the same except that STOs ted to conform to federal regulatory requirements and offer more protection to investors. While ICOs can be launched by anyone with the necessary tech and product, the tokens offered in an STO must be backed by something of value such as company assets. STOs are unavailable to all investors but are more trustworthy than ICOs. Think of STOs as a tokenized crowdfunding sale compliant with SEC rules and regulations. The objective of an STO is to continue blockchain crowdfunding offers of ICOs but with greater investor protection and SEC seal of approval.
Security Tokens Explained: ICOs vs. STOs
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