The term ‘security token offering’ (STO) has been used with various meanings in the press, academic publications and the business community. At present, an STO is predominantly perceived as a new form of technology, rather than a new type of legal relationship between the participants. So far, the STO concept has primarily come into play in relation to projects for the development of blockchain standards, protocols and platforms which allow managing the entire life cycle (or certain parts) of security using blockchain, starting from the date of issuance until the date when security ceases to exist. These projects are aimed at establishing infrastructure — most commonly with an automated system — that not only allows issuing, recording rights to, and conducting sales and primary and secondary transfers of securities, but also ensures that key events in the life of security are carried out in compliance with all sorts of applicable regulations and rules, including disclosure, reporting, approvals, etc. There is no generally accepted statutory definition of STO. From a legal point of view, STO may be perceived in two ways. In a wider sense, STO means an offering of a token that falls under a certain type of financial regulation (securities laws, commodities regulations or other). In a narrow sense, STO is perceived as an offering of tokens that are captured by the term ‘securities’ as defined under the securities laws in the jurisdictions where potential investors are located, as well as in the token issuer’s jurisdiction.



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