Demand for security token offerings (STOs) is growing in the crypto industry, and many leading platforms are taking steps to provide this form of the token sale to their clients. STOs have been created to enable crypto platforms to become compliant with regulations in many countries.
BnkToTheFuture, a fundraising platform for crypto and blockchain based firms, is reportedly working on providing its clients with STOs. The platform is entering into a partnership with Diacle, a crypto consulting firm. The partnership will see the two companies build a shared security token investment and advisory firm. It is reported that BnkToTheFuture’s executives anticipate that there will be an increase in the demand for cryptocurrencies, and an STO platform will be vital in the fundraising process for many blockchain startups.
According to Simon Dixon, BnkToTheFuture’s CEO, the firm receives an average of 45 applications every week from startups in fintech and crypto spaces which are seeking funding. About 18% of these startups are interested in security tokens, and this is a reflection of the growing demand for such a platform as the one being developed by BnkToTheFuture. Crypto and blockchain startups are increasingly moving from initial coin offerings (ICOs) due to the regulatory challenges that come with this method of token offering.
BnkToTheFuture Creating Bridge Between the Crypto Industry and Traditional Investors
The platform provided by the Cayman Islands based firm allows traditional institutional investors to place their funds in crypto startups. This group of investors is not familiar with cryptocurrencies, but they would be familiar with securities. Dixon said that traditional investors want to invest in security tokens because they offer additional liquidity. The liquidity is not readily available because cryptocurrencies are a fairly new asset class on the market.
Currently, there are over 87,000 institutional investors registered with BnkToTheFuture. The STOs platform will help these investors and the blockchain startups seeking investment stay on the right side of regulations that pertain to securities. Diacle’s experience with crypto securities will be of importance in ensuring that this compliance is achieved and maintained throughout the STO process.
STO Market Growing as Demand Increases
The STO market has been experiencing steady growth over the years as players in the crypto industry pay more attention to this form of token offering. In 2017, only two STOs were executed and this number grew to 25 in 2018. By the end of 2019, it is expected that 87 STOs would have been conducted, and these numbers reflect steady growth. According to Chain Partners research group, the STO market is likely to reach $2 trillion in value by 2030.