Security Token Offering (STO)

A Security Token Offering (STO) is a regulated method of raising capital by issuing digital tokens that represent ownership or a stake in a real-world asset, such as equity, debt, or real estate. Unlike Initial Coin Offerings (ICOs), which often lack regulatory oversight, STOs are subject to securities laws and regulations, offering investors more legal protection. Security tokens give holders certain rights, such as dividends or voting power, and can be traded on secondary markets, providing liquidity for traditionally illiquid assets. Example: A real estate development company might issue security tokens representing fractional ownership in a property, allowing investors to own and trade shares in the project.