STOs vs ICOs | How are they different | CryptoCandor
Welcome to this blockchain educational video by CryptoCandor. In this episode Alex talks about STOs vs ICOs | How are they different.
Initial coin offering. Like an IPO (initial public offering) where companies go public and make it possible for people to buy shares in the company. An ICO (initial coin offering) is where a company creates a token or currency and raises funding for their project or cause by selling that token to early investors. STO's (security token offerings) and TGE's (token generation events) are similar but have varying levels of regulations.
Utility Token vs Security Token
There is a test called the 'Howey Test' which if a coin or token passes this test it will be classified as a security token. Security tokens are subject to federal securities and regulations. If the coin or token does not meet the full list of criteria below it will be a utility token.Utility tokens give users the right to use the network they are part of and special rights within the network such as voting.
The criteria for a security is that 1. It is an investment of money 2. The investment is in a common enterprise 3. There is an expectation of profit from the work of the promoters or the third party.
Guide to Understanding Blockchain and Cryptocurrencies
Crypto Session 1 | Blockchain and Crypto Terms You Should Know
Crypto Session 2 | Blockchain Technology Explained + Use Cases
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