The US market is the most attractive market for the ICO campaign. However, as a rule, companies create only their main office here, and for ICO and token issuance they prefer to use another company in another jurisdiction, which allows or welcomes the conduct of open cryptocurrency activities. The company registered on the territory of the United States or abroad limit the participation of residents and citizens of the United States in tokensale. At the same time, a number of other countries with less developed economies (such as Malta) do not just allow tokensale on its territory, but also attract companies to conduct ICO.

Most of the participants of the ICO campaigns believe that by buying tokens, they become investors in securities. This is not always the case. In the US, the Howie test is used to determine whether a token is a security, which helps to determine whether a transaction is an investment contract. In accordance with this test, if a user invests money, hoping to profit from their investments, while the investments are in common ownership and the owner makes a profit from the actions of strangers, such a token is a security and falls under additional requirements for regulation and disclosure of information.

What distinguishes utility tokens from security at the practical and legislative levels?

As a rule, companies conducting ICO try to position their tokens as a utility, otherwise they will have to comply with the rules established by regulators. Users, when purchasing such tokens, consider themselves to be full-fledged investors and rely on control over the management of the company, the right to vote, the share of profits, as well as the right to newly issued shares. However, possession of cryptographic tokens only entitles you to use it as a means of payment or product.

Some tokens can be classified as securities — security tokens which must be regulated like other traditional securities. Security tokens are in fact, shares of the company. The main difference between them and utility tokens is that the owners of the security token have the right of ownership, while utility tokens are only valid as coupons and do not give their holders the rights of investors.

In light of this, the regulatory authorities of the US and other countries began to pay special attention to virtual tokens and recently, blockchain startups have started identifying their tokens as security, which have the most similarity to traditional securities. The successful implementation of security tokens involves a carefully planned procedure, taking into account a set of practical, legal and technical aspects. Often, such a procedure is easier to carry out in Malaysia or other countries, since the US significantly complicates the procedure for registering SEC tokens. Why, one may ask? Security tokens are financial instruments of the future, which allows the reduction of the level of commission, accelerates the process of transactions, contributes to the development of the free market, reduces manipulation by financial institutions and accelerates the growth of the investor base.

Security tokens have already attracted the attention of various financial organizations and companies. Reputable players working in global stock markets have shown their interest for several reasons: the security token has a high potential for the division of shares, makes it possible to conduct round-the-clock trading and to make instant payments.

Investors regard security tokens as more advanced tools that allow investing in ordinary assets, taking advantage of digital technologies. Everything is not so simple here because of the regulatory uncertainty surrounding security tokens and the expected regulation in this area will be one of the most discussed topics next year.