Wrestling the Jellyfish: Keeping Up with STO Regulation

At SolidBlock, we know that trying to stay up-to-date with STO regulations these days is like wrestling a jellyfish:  it’s slippery, hard to define… and it sometimes stings as regulators in different jurisdictions take one step forward, then two steps back.  

A good example of this is the recent SEC crackdown in the U.S. on ICOs.  A lot of people wonder how this is going to affect STOs, but believe it or not, on that front, this is probably good news.

Why?  Because at the same time, the SEC has taken its first steps towards creating clear definitions, for instance, issuing its first no-action letter for a token issuance.  On the surface, this letter doesn’t really say much, but it’s a solid first step towards clearing up some of the grey areas in American securities law.  And once we have clearer definitions in this arena, there’s less need to be wary because we’ll know exactly what’s allowed and what isn’t.

One more reason these lawsuits involving ICOs probably won’t affect STOs is that STOs by definition create greater accountability.  The higher degree of disclosure required of an STO is built-in insurance against scams and fraud.

On the other hand, however much progress the SEC makes towards creating an STO-friendly investment climate, it’s very unlikely that the U.S. is going to become an STO haven in the near future!  

Although more STOs have been issued in the U.S. than anyplace else (with the UK and Switzerland in second and third place), it still lags far behind emerging hubs like Malta, with its innovative laws for monitoring and transparency.  And the SEC has already made it clear that it aims to treat anything resembling a securities offering in the same way it always has.

Other countries bubbling up as innovators when it comes to crypto regulation and STO are Canada, Estonia, and Lithuania.  Switzerland is still one to watch as well, with its solid history as a financial haven as well as comprehensive AML and KYC regulations already in place which make crypto investment simpler while ensuring full compliance.

As we’ve seen, the state of this industry is still far from being clearly defined.  But what we can tell you is that we’ll be tracking new developments carefully.  STOs are all we do, which means our business depends on being aware of everything going on all over the globe, as well as working with influencers worldwide to help forge the next generation of securities law and regulation.

If you’re looking to take advantage of emerging opportunities in the STO arena, you’ll know it’s crucial to follow everything that’s going on so you don’t miss a beat.  Fortunately we’ve made it easy.  You can track important events and developments through our LinkedIn channel, so follow us there to get all the important updates and keep abreast of tokenization trends and their impact on you and your money.

Miriam Green

An award winning poet and author of The Lost Kitchen: Reflections and Recipes from an Alzheimer’s Caregiver (Black Opal Books, 2019), Miriam transitioned post-COVID into content writing. Miriam’s love of words has served her well. As a young writer she edited two newsletters at the Federal Reserve Board under Chairman Alan Greenspan. Miriam writes a blog at The Lost Kitchen, describing the hardships of caring for a parent with Alzheimer’s and featuring related recipes. She is a 30-year resident of Israel, and a mother of three.

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