The securities market is worth trillions! It is therefore not difficult to understand why more and more companies are beginning to release security tokens. Virtually every investment on earth potentially could be “tokenized,” representing hundreds of trillions of dollars. Unfortunately, that is easier said than done. Launching a security token is a technical, legal and regulatory nightmare due to the current obstacles and SEC regulations facing security tokens. Previously, ICOs escaped the radar of the SEC, but now the SEC shook up the red-hot ICO market with force. However, regulation is good because it protects unsuspecting and inexperienced ICO developers and investors from abuse by many fraudsters in the ICO environment.

Currently, there is no competitive pricing environment of vetted ICO service providers — ICO service providers charge anything they wish. Now is the right time to prepare for a more regulated ICO industry. Cryptocurrency developers are hesitant and unsure about all the procedures required when offering security tokens to the crypto community. Early stage start-ups already face enough risk of failure. Adding the potential of project derailment, fines and even imprisonment for ICO developers causes a critical and stressful situation.

MOBU — Embracing Change

MOBU solves the problem by consolidating all the technical, legal and regulatory requirements into a decentralised platform and end-to-end solution for launching compliant security tokens. There are mainly three regulations in the Securities Act of 1933 regarding the launching of security tokens namely Regulation A+, Regulation D, and Regulation S.

MOBU will support Reg A+, Reg D, and Reg S compliant security token offerings, and with the incorporated ability to select experienced legal counsel across multiple jurisdictions within the platform, token issuers can be sure they can create compliant tokens within their local jurisdictions.

Relevant Terminology

Basic Understanding of Reg. A+

Regulation A is an exemption that companies can take from registering their securities with the US Securities and Exchange Commission (SEC). The updated version of Regulation A (Reg A) is referred to as Regulation A+ (Reg A+). Reg A+ is sub-divided into two tiers:

The Two Tiers in a Nutshell:

Many security token offerings will be likely to use Regulation A+ for several reasons:

· Two tiers · Open to all · No holding period of new tokens · No required minimum capital raise goal (unless listing on NASDAQ or NYSE) · Allows higher capital raise limits · Shorter document preparation time · Lower legal and filing fees

Final Thoughts

Security tokens will revolutionize the traditional finance world. Well prepared ICOs that launch compliant security tokens will thrive in this new regulated environment and will go from strength to strength.

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