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STOWhat is STOThe full name is Security Token Offering, namelySecurity Token Issuanceexist。

existlegal aspectexist

existtechnical leveltechnical level

Why is it said that STO is a special security? It is because its carrier is Token (token), which is a further decomposition after the IPO. In addition, STO uses the ERC1400 protocol to generate tokens, and the issuer can generate a certain number of tokens according to the financing situation through this technology. In the agreement, more equity financing elements and restrictions are written on the chain, such as address real-name system, transaction restrictions, prevention of money laundering, lock-up orders, etc., which are the embodiment of programmable securities.

"Stock" means that it represents equity in a business. "Special" means that he technically combines the blockchain technology of encrypted currency, which can be programmed and is more convenient for settlement, flow, transaction, traceability, etc. The "stock" attribute in the front is equivalent to the root, and the Token based on blockchain technology in the back is the leaf. Without a compliant root, the leaf has nothing to attach to.

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STOWhy STO has attracted much attentionIt became popular in the United States at the end of 2017. In response to the endless ICO scams, people began to seek aMore compliance and better protection of investment interests

financing options. At this time, someone proposed the form of STO fundraising, that is, financing through securities tokens.

The birth of STO has brought a new dawn to both markets.

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The difference between STO and IPO/ICOAs mentioned earlier, STO is a compromise between IPO and ICO.

It not only has the securities attributes of IPO, but also has the technical attributes of ICO.

STO has the advantages of having some regulatory attributes and saving fundraising costs, and it can create faster and more cost-effective financial tools.Compared with traditional fundraising methods (IPO), STO hasLegality, Compliance, Administration, Management, Time, Trustetc. have saved costs. Compared with ICO, STO recognizes itsSecurities

It is subject to the supervision of the securities regulatory agencies of various countries.

At the same time, compared with IPO, the investment threshold of STO is lower, and the screening ability for qualified investors is weaker, and it may also "catch leeks".At present, the policies of various countries are still unclear, and there are certain policy risks。

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Industry Views on STOPan Gongsheng:(Deputy Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange) When talking about the P2P online lending industry, he said that after various deployments, the overall risk level of the industry has declined to a certain extent during this period. He also mentioned that as the global control over ICO activities has been strengthened recently, some institutions are fooling around with STO (Security Token Offering).

In China, it is still an illegal finance in essence.Wang Biao:Judging from the current policy environment, STO does not have many advantages, butIn the long run, STO may be a new direction.

Prior to this, 99% of blockchain projects were early-stage projects or air projects. The emergence of STO has enabled blockchain projects to have the support of underlying assets and real valuation basis, which is a more feasible way.Chen Yun: The application of STO in the current financial system is of great significance.

Through the application of blockchain technology and smart contracts, there is an intelligent transformation of traditional securities issuance, which can greatly reduce the cost of asset issuance, improve the efficiency of issuance, and reduce the delivery, transfer, liquidation, and settlement of traditional securities. When the user completes the transaction from the exchange and withdraws it to his wallet, ST has completed the delivery, which is very efficient and of course more convenient for supervision.Nuclear Finance:Just like email replaced written letters, weSecurity tokens are also expected to replace traditional securities as the preferred method of issuing, trading and managing asset-backed securities.

We have seen examples of tokenization of funds, businesses, and real estate. With the launch of new security token exchanges and markets and the global compliance of various tokens, the asset-backed securities market will bring unprecedented opportunities to investors.Attorney Wang Wei:The issuance of digital assets has developed from the initial avoidance of securities in every possible way to the current initial attempt to exempt registration, but it has only been more than a year.

Although STO still has a long way to go at the practical level, it has proposed a new direction for the future supervision of the blockchain industry.Vernacular blockchain:Recently, STO has been highly praised. but,STO has no "lessons learned" from compliance to landing, and there is no broad consensus at presentStill an unsolved mystery.

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STO policy attitude

Beijing/On December 4, the Beijing Mutual Finance Association issued the "Risk Reminder on Preventing Illegal and Criminal Activities in the Name of STO" (hereinafter referred to as the "Reminder"). The "Reminder" pointed out that "recently, some institutions or individuals continue to engage in publicity and training, project promotion, financing transactions and other related activities in the name of STO." At the same time, it pointed out, "Here, we solemnly remind all relevant institutions and individuals in this city: All financial businesses are subject to regulation.STO is suspected of illegal financial activities, and should strictly abide by national laws and regulatory regulations, and immediately stop all kinds of publicity and training, project promotion, financing transactions and other activities related to STO.

Institutions and individuals suspected of violating laws and regulations will be severely punished such as expulsion, closure of website platforms and mobile apps, and revocation of business licenses. "

Hongkong/On November 1, the Hong Kong Securities Regulatory Commission issued new regulations on virtual asset supervision, considering including virtual asset investment institutions and trading platforms under supervision, and promoting regulatory sandbox experiments. is interpreted as。

"The prelude to the opening of STO"

USA/The chairman of the SEC said"Regardless of the method used to issue securities, securities laws must be followed"

. As far as the core of STO is concerned, it is in line with US securities regulation, but the final attitude of the US government is not yet clear. If tZERO's statement email is true, it is a positive sign.

Japan/The policy is relatively loose, BTC has been legalized in the country, and registered Token is allowed to be used as currency. Regulatory authorities stipulate,Every Token issuance must cooperate with a local licensed exchange.

However, there is currently no policy to regulate STOs in Japan.

Singapore/The Monetary Authority of Singapore (MAS) saidSTO falls within the scope of the Singapore Securities and Futures Law

, issuers of such tokens will need to file and register a prospectus with MAS prior to a public offering, unless there is an exemption.

Malta/A Financial Instruments Testing Bill is being drawn up,It stipulates that STO issuers are obliged to pass relevant tests,

and apply to the Virtual Financial Assets Act.

Canada/On August 24, 2017, Canadian Securities Administrators (CSA) officially announced that the securities law requirements apply to digital currency issuance.

The Canadian Securities Exchange also intends to establish an STO trading platform.There is no way around the existing securities laws of various countries. Some people say that "STO is a kneeling rebellion". If STO is finally managed by the "Securities Law", it will not be much different from IPO. Only institutions and professionals are eligible to purchase Token, which is not conducive to the development of STO. The compliance and implementation of STO is unprecedented, and a broad consensus has not yet been reached. It will take time to prove its future development.

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Q: The Beijing financial regulator believes that the concept of STO has the risk of illegal fundraising. What do you think?

 

Cao Huining:Cao Huining:

It will take some time to observe this. The key lies in how high the threshold for STO is set by overseas regulatory authorities. If the final setup cost is the same as an IPO, why bother doing an STO? Just do an IPO.I think STO still needs a certain threshold space.

Why is it difficult for SMEs to go public? Because the cost of doing an IPO is very high.

There will be regulatory competition and regulatory arbitrage around the world, and startups will go to places with the lowest regulatory costs, where they are compliant and able to grow their companies.

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