Expert: The Best and Worst Jurisdictions for STO’s

2021-08-20 15:46:25 - VILNIUS - (PR Distribution™)

Vytautas Senavicius, Ph.D.

Initial Coin Offering was the number 1 method of funding blockchain businesses until recently, although it seems to have come to an end. Some believe that Security Token Offerings, or the STOs, is the future. Unlike others, the security token is backed up by real assets. Holders of such tokens are entitled to ownership rights, and that is why these tokens are already regulated by some of the world‘s largest economies.

Ideally, the best legal jurisdiction to launch your new STO is the one which has legal certainty on STOs and is reputable. Here is the list of the best legal jurisdictions for STOs:

Lithuania – this country seeks to become a major hub for fintech, where magnificent work towards creating compliant security token regulation is done already. A task force, led by the Ministry of Finance, created multi-institutional explanations favorable for STO issuers on accounting, taxation, as well as the issuance of such tokens in compliance with financial market rules in the EU. You can also get an opinion from the supervisor of financial markets whether your ICO has the features of a security token free of charge.

Switzerland – this citadel of stability has always been a haven for businesses operating in finance. Crypto-businesses here could be supervised by the Swiss Financial Market Supervisory Authority (FINMA), which is known for supporting financial innovation & technologies. Switzerland issued guidelines for ICO’s where they state that for security tokens, financial market laws shall apply. You can also apply with a request to get an opinion on whether your ICO has features of a securities offering.

France – the French parliament initiated a debate about a legal proposal which holds some core changes for the country’s legal framework for crypto assets and STOs. France also plans to issue non-binding certificates for the compliant ICO.

Israel – many experts in the crypto-world refer to Israel as an “ICO hub”, mainly because Israel greatly supports the blockchain technology. Its regulatory body is a committee specially formed to regulate cryptocurrency. The committee does not seem to be overly restrictive.

Among the worst jurisdictions for STOs are Nevis and Gibraltar. Nevis has almost no crypto regulation, thus this offshore jurisdiction is a bad choice for issuing a compliant token. The new Gibraltar security law applies to STOs because it considers securities equal to shares in a company.


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