Executive Education

Security Token Offerings – a new crypto trend that might bring appealing benefits

With numerous FinTech trends emerging over the last years, more people have directed their focus towards investment opportunity revolving around cryptocurrencies and towards Initial Coin Offerings for their enterprises’ equities.

Once Bitcoin has reached impressive growth, numerous new altcoins have appeared and more people have become interested in investing their money into a digital asset of this sort, and startups have become eager to issue an ICO of their own.

However, considering the lack of regulations revolving around the usual ICO, financial protection isn’t a guarantee. Legal specifics are still not exactly provided in 2018, but a new megatrend is on the rise, which could make things more convenient. Security token offerings come with the following advantages:

Legal security

Because they abide by regulatory frameworks, security tokens come with reduced legal inconveniences. Conducting an ICO the way many startups have done until now, without any regulations involved would make your offering less appealing to investors and might subject you to potential legal issues in the future, things you would probably want to avoid. The legality of security tokens is an aspect that can make things far more convenient, providing a wider reach on a global level. Considering that in some regions cryptocurrencies have not yet been embraced due to the regulatory uncertainty involved, this could be the solution you were seeking for a proper tokenization for your company’s equity.


Once you look into the subject a bit deeper, you will discover the limited versatility of regular utility tokens. While security tokens can in fact act as utilities, depending on the specifics of the situation, utility tokens are unable to switch to this specific role. The functionality and versatility of security tokens make them such a viable option for companies. Once issued, your token can be used in the manner that suits your company’s affairs best. Either as an online payment method on your site, as a voting right, network gateway and the list can go on. Together with the liquidity ensured by this ICO alternative, high industry success might be obtained.


Last but not least, issuing a security token is not only faster but far more affordable than conducting an ICO through a utility token. Fund marketing, creating, listing the token, and even investor campaigns can be pursued in a cheaper manner, which of course is a plus that can allow companies to reach a higher level of profitability, and draw in investors more effectively.

While not so long ago, if you were planning to invest in an altcoin, or were interested in developing an ICO for your company, you would have needed to take a few risks, now, with the security token trend emerging, you might be able to reduce those risk and enjoy higher profits. The benefit mentioned above are the ones that have determined both startups and investors to give this topic more of their consideration, and why you should do the same, if the cryptocurrency market is one in which you see profitability potential.

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Linda Anderson
Linda is a writer and musician residing in Boise, Idaho in the United States. She graduated from the College of Idaho with a Bachelor's Degree in Business and a focus in marketing in 2014.