The lack of regulatory protection on the quick resale of tokens left the investors without any kind of regulatory protection let to lot of pump and dump experiences for investors.
Access to capital is very important for entrepreneurs. And the new hurdle that entrepreneurs would like to jump off with security token regulation is about how to convert real assets in to tokens and how to do it the right way because with stricter regulations wrong moves are going to land the fundraisers in jail.
The STO industry would not lose track of the fact that regulators have been restrained with ICOs and with the new regulations and improved orders in place, there is no chance for any STO to work without complying with the new regulations. Regulators are not going to be merciful with fancy non-compliant STO anymore.
The roads for cryptocurrency companies have been very rocky. The press was very negative on them. The government was cracking down on them. Strict regulations in the US have caused the entrepreneurs to go to friendlier localities like the Malta and Bahamas. Malta and Bahamas are looking to release their state backed cryptocurrency.
Regulated security tokens provide with a low friction method of raising capital. These enterprise tokens will mainly focus on asset backed tokens. For instance, Leaseum Partners are issuing compliant security tokens that are asset backed with real estate properties.
Since there is a regulated custodian, the tokens can be exchanged freely on the blockchain technology with a sure settlement in the finality of the resale. This also paves way for bringing in new types of qualified investors to participate in promising asset class.
In real world transaction, security tokens are representing only a small fraction of tokenized transactions. This industry is set to move to 2019 and beyond with regulatory comfort and confidence vested with its investors. Investors who are looking for new places to invest their money are going in search of new ecosystems and places that they can visit. With regulation the risks are reduced, there is increased efficiency and transparency in the ledger. There is overall protection for every party involved in the transactions.
There is going to be improved enforcement by the Securities Exchange Commission on those platforms that are non-compliant. This will eventually provide for expanded and preferred use of STOs.
It is becoming increasingly easier for investors to decide on which broker to invest with. So, when investors have some money to invest in tokens, they know how to go about choosing a reliable and regulated platform.
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