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oodlestechnologies

STO development company | Create Your Own Cryptocurrecy | Launch Your Own STO

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Security token offerings are playing a vital role in the crowdfunding and finance management for different industries. Check how Oodles STO development services enable efficient, secure, and compliant tokenization of securities and their offerings.

We are a reliable STO development company enabling full or partial automated transfer of ownership, attract minimal administrative costs by eliminating intermediaries, and providing investors complete control over immovable assets with compliance to financial regulations. The STO solutions provided by our blockchain team are highly secured, which augments legal fundraising activities.

 

For Live Demo Reach Us At: Info@oodlestechnologies.com

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    • By angelacassan
      Though the U.S. Securities and Exchange Commission has regarded the use of utility tokens as a dicey situation leading to unregistered broker-dealer situations, the hype encompassing security tokens has not reduced.
      The security token market is transforming at the pace of lightning. However, it is still in its days of infancy. Besides, there are many ambiguous areas when we consider the market for token buyers as well as the business model adopted by startups today. Not to mention that entrepreneurs are also wanting to raise assets through regulated blockchain.
      The entire process of setting up a Security Token Offering (STO) is confined to two major types of tokens:
      Utility Tokens
      These type of tokens are not investments and do not give token holders any rights or stake in a company. Simply put, utility tokens represent future access to the products and services of a company.
      Security Tokens
      Security tokens are different from utility tokens in the way that they are a manifestation of the company’s stock shares. They are supported externally by tradable assets which empower investors by giving them more authority.
      Having understood the different types of tokens, let us explore in detail about the various benefits of Security Token Offering.
      More Compliance as it can be hard-coded
      Fractional ownership
      Attracting new investors at a global level
      Better flexibility and scalability for business owners
      Low barrier for entry
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      We have seen the blockchain technology revolutionize the perception of investments and fundraising. Usually, tokens were offered in an initial coin offering (ICO) and it provided access to a specific network or services. As opposed to these, security token offerings or STOs are actual financial securities that are backed by something tangible. It could be equity, assets, debts, profits, revenue and even the legal rights of voting in an organization.
      What makes the STOs more appealing than the ICOs is that it has the same functionality of conventional security which also facilitates fractional ownership. Unlike ICOs, STOs are subject to Federal laws and are highly regulated, and designed to safeguard the interest of the investor. Security tokens are on the blockchain and the smart contracts enable them to act in a defined way. The smart contract on a blockchain can be programmed to make automatic payments to the bank against a loan.
      The Regulations Governing STOs
      There are a lot of Government and statutory bodies that have recognized security tokens as valid securities. There are certain bodies like the CFTC that we use Bitcoin as a commodity and the IRS defines cryptocurrency as property.
      Commodity exchanges do not need to be licensed as a regulated entity whereas platforms offering securities are required to register as a national exchange or Alternative Trading System or apply as a broker-dealer. Even more, companies that are involved with financial assets like bonds, stocks, and bank deposit are required to comply with the consumer protection laws like the Bank Secrecy Act and the USA Patriot Act.
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      Fast
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      Round-The-Clock Trading
      One of the greatest drawbacks of the current security system is that it is restricted by time. Security tokens, however, do not have this constraint and you can treat them any time of the day which makes them more appealing than other traditional models.
      Disadvantages of Security Tokens
      Sometimes, not all ‘advantages’ comply with the definition of how advantages are meant to work, and when it comes to security tokens, that is how some ‘advantages’ precisely works. Since the security tokens are regulated, there are a lot of restrictions on who can participate in the STO. The accredited investors are not available in abundance, and it creates a huge demand-supply gap. This is one of the reasons that security tokens have not seen mass adoption yet.
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      How to Launch Your Security Token Offering
      Issuing securities require registration with the Securities and Exchanges Commission (SEC), and can be a  complex and expensive process that is meant only for established businesses. However, thanks to the constant hunger for loopholes, the project can make use of the JOBS Act of 2012. JOBS, the acronym for Jumpstart Our Business Startup, was aimed at facilitating funds for startups, was not essentially meant but somehow seems to fit the need.
      There are different regulations like Reg S, Reg D, Reg A+, and Reg CF that govern the STOs, with each regulation having its own protocol.
      Reg S facilitates the non-US companies to raise funds from the US investors, subject to them satisfying the statutory requirements of their jurisdiction. Reg D defines annual offer limits and the kind of investors who can be solicited the STO. Rule 506 of Reg D defines no limits in annual funds raised but is limited to accredited investors, although one of the sections has permissions for sophisticated and non-accredited investors, capped at 35. Sec 504 of Reg D limits the annual funds raised at $5 million but is open to all kinds of investors. Reg A+ is in place to facilitate the raising of funds of less than $50 million from non-accredited investors and $20 million from individual willing to invest, irrespective of their investor-status. Since one of the requirements for Reg A+ two years’ financial statements, this can be expected to turn out as bliss for established companies requiring secondary levels of funds. Also, unlike Reg D, there are no restrictions on the resale of the tokens. Reg CF, as the abbreviation implies, helps startups crowdfund their investments, capped at US$1.07 million. Also, Reg CF mandates a 12-month lock period on secondary trading. While this might seem like a deterrent, the possibility of anyone investing and reaping the funds makes it a welcome avenue for small scale investors. Blockchain App Factory’s Business Consulting
      Blockchain App Factory brings you solutions on security tokens and STOs. Our team creates security tokens for your organization by establishing your compliance with the required regulation. Subject to the legal Framework, we also help you go public with your solicitation. Our deep understanding of the business and the implications of the blockchain enable us to create comprehensive and precise smart contracts that strengthen the value of your tokens. All you need to do is just drop in an inquiry and our team will be happy to get in touch with you and set your security token sailing in the right direction
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      Your search for the best service providers of security token offering in India ends with Blockchain App Factory. We are a top STO development firm in the country that offer streamlined solutions along with a wide variety of features that are guaranteed to give your project a competitive advantage.
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      Blockchain App Factory can help you launch your own STO project in no time. We offer turnkey blockchain and cryptocurrency solutions that integrate the best practices and the latest technology into your projects that give you a competitive edge.
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      Want an end-to-end and compliant security token platform? With Blockchain App Factory's optimized and readymade solutions, you can launch a fully-functional trading platform having numerous features like ERC20 compatibility, trade matching, regulatory compliance, security servicing solutions, and much more.
       
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