Security Token Offerings

Security Token Offerings

A Security Token Offering (STO) is an offering and sale of digital tokens which are considered securities under federal U.S. law. Security tokens sold via an STO are virtual tokens that exist on a blockchain and meet the definition of a security under federal U.S. law, whether the tokens represent function on a platform (known as “utility tokens”), ownership of a real-world asset (asset-backed tokens), interest in a fund (fund tokens), equity (equity tokens) or debt (crypto bonds).

Among the benefits of using a STO are that companies and funds may raise capital from investors and benefit from the advantages that blockchain technology offers, including:

  • Increased liquidity.
  • Access to capital on a global scale.
  • Fractionalization of ownership.
  • Increased transparency and security.
  • Simplified investors’ management, etc.

We can help you through every stage of an STO. Our team has represented a wide range of clients in all types of STOs by providing legal advice and additional services throughout the STO process, including:

  • Conducting a detailed legal analysis of your token to determine whether the token would be classified as a security under U.S. federal and state law.
  • Designing the appropriate structure for your token.
  • Determining the appropriate entity structure and jurisdiction for the STO.
  • If necessary, ensuring your token qualifies from a securities exemption from registration by utilizing one of the following exemptions from registration: Regulation D, Regulation S, Regulation A+ or Regulation CF.
  • Preparing the token contracts, private placement memorandum, offering circular, investment agreements, subscription documents and related documents for your STO.
  • Creating your AML & KYC policies and procedures and helping you implement them to verify investors’ identities and eligibility to participate in the STO.
  • Providing legal support to your STO after its launch, including advising you on exchange listings, secondary trading issues, subsequent usage of security tokens and the applicability of money-transmitter and other laws.
  • We own Two Fox, a digital marketing ICO agency and with this resource we can help you cultivate your brand and communicate your message to a wide array of audiences worldwide.

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