STO stands for “security token offering” and is when a company issues securities for sale to investors in the form of a digital crypto asset, or security token. These tokens represent an investment contract into an investment asset - such as stock. An STO is an offering that complies with all governmental and regulatory statutes around the issuance of securities, the SEC and FINRA regulate and enforce the rules for the offering of securities.
In simple words, an STO (Security Token Offering) an issuance of a security (under any securities exemption files with the SEC) where the security sold is transferred by using a cryptographic technology, for example the blockchain ledger.
We define two types of STOs (Security Token Offerings) based on the securities exemption used:
When the security is issued via Reg CF, we call it Mini-STO - because the issuer can sell a maximum of $1,070,000 worth of securities.
When the security is sold via reg D or Reg A+ (either Tier I re Tier II) we call STO because the issuer can sell up to $50 mil worth on securities (via )