ICO introduced a new way of raising capital in crypto industry and became very popular in a short time. STOs (Security Token Offerings) now appears to be overtaking the spotlight. ICO has its limitations in an insufficient number of regulative laws and low liability. STOs offer a way to overcome these obstacles.
ICOs were intended to solve problems noticed in the IPO. They had many advantages. ICOs were simple and easy to use, available for everyone, with lower entry requirements. All the users had to do was to organize a team, put together a white paper, join an ICO platform and create a token. Everyone with a token and an intention to invest could engage in ICO.
ICO (Initial Coin Offering) had one very important issue. Due to nonexistent regulations, it was operating in a “gray area”. Foggy terms such as “utility or security” token confused the investors and suspicious companies deceived them.
All this led to acknowledging a need for regulations that would protect the investors and organize the process of blockchain investing.