Security Token Offering (STO)

A Security Token Offering (STO) is a type of offering in which businesses can tokenize securities and issue them as a means of fundraising. In the context of STO, security means a financial instrument that represents ownership or a stake in an asset or company.

Security tokens, unlike initial coin offerings (ICOs), are subject to specific laws and regulations that deal with securities and are only traded on regulated exchanges. By purchasing security tokens, investors can get various rights in the company like dividends, voting rights, the right to interest on generated profits, and so on.