Security Tokens are digital securities which are regulated by the
SEC. Unlike traditional Securities, Security Tokens are held in
Investor's private Wallets. That means that those Securities are
in full control of the Investor and not are held by intermediaries
such as banks etc.
100% of the stocks and bonds trading on Wall Street today COULD be
tokenized, and in five years, 100% of the stocks and bonds on Wall
Street WILL be tokenized
Robert Greifeld (Former Chairman & CEO of @Nasdaq)
A security token represents traditional, private or public
security interest. It could represent a share in a company,
an LP interest in a fund or a trust, a real estate property
or a member share in an LLC.
On March 7, 2018, the U.S. Securities and Exchange
Commission (SEC) published a new report regarding the state
of cryptocurrency assets and the potential risks for
investors. The report states that some ICOs, digital assets,
and cryptocurrencies must be classified as “securities”, and
the term security token was born to represent a legal form
of an asset backed security represented by a token.
The SEC is concerned that different parties could conduct
illicit or fraudulent trading through cryptocurrencies that
are not asset backed and therefore do not provide any
guarantee to investors. We highly encourage not to invest in
cryptocurrencies and to invest only in SEC regulated
Issuance of new Security Tokens or Security Token Offerings
(STO) are legal and compliant if they are issued according
to SEC regulations. Issuing a new Security Token requires
great knowledge and it is highly recommended to work with a
proficient issuance partner. Offers are required to register
with the SEC or exempted.
A Security Token or tokenized security is where an asset has
its ownership structure managed by a blockchain, including
units of ownership represented as digital shares/tokens
(instead of paper share certificates). In Security Tokens,
the investors holds their "securities" of Security Tokens in
their encrypted wallets.
Security tokens enables a new generation capital formation
and fundraising, and will be used to tokenize the trillions
of dollars of global assets (real estate, debt, equity and
many other asset classes). Security Tokens can help
companies, in all sizes, to raise capital by new Security
Token Offerings (STOs), and improve liquidity of existing
assets such as real estate, equity and debt.