STOs are the next big hype in the blockchain world due to the constant demand for regulation for investors and sellers. They provide the perfect combination of security and digitization. Companies that want to conduct their STOs from Liechtenstein can now expect great things. Since the beginning of February, the Own Group, together with partners, has been offering the STO Alliance, a service provider network for the implementation of STO projects.

Own AG

Coming from the traditional financial services sector, Own AG has set itself the goal of connecting companies directly with investors and thereby saving the costs of middlemen. This has created a digital marketplace that makes it easy for companies to raise capital.

What’s new is that business can now be done on a single, global platform. The Own Group also specializes in tokenization solutions for businesses across all industries.

STO Alliance

The STO-Alliance is a cooperation of five Liechtenstein service providers who have specialized in blockchain in their respective areas. These include Own AG, Nägele Law, Actus AG, AREVA and AUDINA.

The STO-Alliance offers an end-to-end solution for STOs through the cooperation. Florian Batliner (COO and Co-Founder Own AG) believes that a company should be ready to launch a regulated STO within 10 weeks, provided that all documents are ready. The project also makes it possible for intermediaries and fees to be greatly reduced.

Complete package and one-stop shop in Liechtenstein

In order to implement an STO as quickly as possible, the STO Alliance offers 4 large thematic blocks with the necessary services:

  1. legal support (business model, prospectus)
  2. business services (e.g. setting up a company, opening a bank account)
  3. taxes & accounting
  4. audit services (e.g. company evaluation)

Through the additional use of the FAST platform (Financial Asset Tokenization Services), the entire lifecycle of property and service (onboarding, tendering, compliance, etc.) can be managed.

The STO Alliance does not only operate with service providers from Liechtenstein, but, as Florian Batliner explains in the interview, the Alliance also offers a collaboration with the SEC-registered broker-dealer, Hamersley Partners, in the USA. In this way, STO projects can make their shares accessible to investors in the world’s largest financial market, while US companies can gain access to investors in the European market. In the future, the market will also expand into Asia. Talks with Hong Kong are underway.

Why Liechtenstein?

One of the most important points for the STO Alliance to operate in the country is the support of the government to Blockchain and the stable economy, which has even brought with it an AAA country rating from Moody’s and Standard & Poor’s. The STO Alliance has been able to achieve a good rating in the last few years. Furthermore, secure economic areas can be served from Liechtenstein: EU, EEA and the Swiss customs area.

Another important point in Liechtenstein’s favour is the planned legislation on the regulation of tokens and blockchains. The VTG (Trusted Technologies Act) aims to create a legal framework for the use and trade of digital assets. The new legislation will not only strengthen Liechtenstein’s position as a European crypto-hub, but could also have implications far beyond national borders.

The Liechtenstein location thus offers great advantages, as blockchain companies have to cope with special requirements in addition to normal company foundation requirements. In some cases, additional and special legal requirements apply, and a blockchain company is also treated differently from a tax point of view. But especially when opening a bank account, the KYC and AML must be carefully and cleanly filled out. The STO Alliance helps with all this so that your own STO project can start within 10 weeks.

ICO vs. STO

An ICO, on the one hand, is an initial coin offering in which a utility token. Probably the most famous examples of utility tokens are crypto currencies such as Bitcoin or Ethereum.

STO, on the other hand, stands for Security Token Offering, which means that a digital and cryptographic token is backed by tangible assets. Assets could be examples of share capital or debt capital (read more HERE). Until two years ago, nobody knew STOs. The new way of raising capital was created by the strong fall of crypto currencies, scams and uncertainties last year. STOs were finally introduced through the demand for regulation.

Own AG, too, wanted to offer something additional that would keep pace with the changing times. There was no question that a project in the area of STOs would be founded as early as 2017.

What are the advantages of STOs over ICOs?

As a rule, ICOs are unregulated, decentralized and have hardly any legal protection for token owners. An STO, on the other hand, takes place in compliance with the relevant regulations and is handled, for example, as a security. Both the investor and the seller are protected in the market.

In contrast to ICOs, STOs also have the potential to compete with traditional financing instruments such as IPOs. They offer companies the opportunity to attract capital in the same way, but at lower cost, as it is not necessary to involve investment bankers or lawyers to the same extent.

Due to increased legal certainty, STOs will ultimately attract institutional investors. ICOs will not, at least not on a grand scale. Institutional money is the big draw. A study by LAT crypto research says that the market for security tokens will grow to 5 trillion US dollars by 2025. This is enormous compared to the current size of the ICO market.

STOs are the next important milestone for blockchain-based fundraising. Once innovative investors are on board, the sky is the limit. At this point it will be exciting to see which projects the STO Alliance will work with and which projects will make the big leap to the STO.

 

Bild: ©Own AG