Advantage of Security Token Offering Quickly Explained
A SECURITY TOKEN OFFERING (STO) IS A PUBLIC OFFER OF A SECURITY THAT IS TOKENIZED. THE OWNER OF THE TOKEN OBTAINS RIGHTS IN A COMPANY OR CONTRACTUAL CLAIMS TO ASSETS AS PROMISED BY THE SECURITY, DR SUSANNE GROHÉ OF PAYTECHLAW EXPLAINS. IN CONTRAST, AN ICO (INITIAL COIN OFFERING) IS USUALLY NOT BACKED UP WITH ASSETS, BUT MOSTLY INVOLVES THE ISSUANCE OF A CRYPTOCURRENCY OR A UTILITY TOKEN. THE UTILITY TOKEN ENTITLES THE OWNER TO PURCHASE GOODS OR SERVICES FROM A COMPANY. THE RISK OF AN EMPTY PROMISE EXISTS WITH BOTH, BUT WITH THE SECURITY TOKEN OFFERING THERE IS A LEGAL RIGHT TO A SHARE OF AN ASSET AND ALSO A MUCH STRICTER REGULATION SET UP BY THE U.S. SECURITY AND EXCHANGE COMMISSION (SEC).
Numerous projects like our BCH for example use tokens issued on the Ethereum blockchain and are ERC-20 compliant. ECR-20 is a technical standard used for smart contracts. Most projects, including the BCH, use utility tokens or coins. These are digital assets with utility that function solely as a means of exchange in a decentralized network. A utility token may be used, for example to pay transaction fees on a blockchain-based platform or to gain access to the system and/or the services. They can be sold to the public, for example, in exchange for Ether, the cryptocurrency of the Ethereum blockchain.
A security token is something that represents legal ownership of a digital or physical asset such as real estate or artwork or company interest that has been verified on the blockchain. They are directly related to the growth of the company. These tokens represent a classic money investment.
THE HOWEY TEST
The Securities Act of 1933 and the Securities Exchange Act of 1934 dictate much of the U.S. government’s approach to financial regulation. Under these acts, transactions which qualify as ‘investment contracts’ are considered securities, meaning that they are also subject to specific requirement related to disclosure and registration, Investopedia explains. The so-called Howey Test is the standard methodology put in place by the U.S. Supreme Court to determine whether a transaction is, in fact, an example of an ‘investment contract’. The Howey Test refers to the 1946 case, SEC versus W.J. Howey Co.,
a lawsuit involving the Howey Company of Florida, which reached the Supreme Court. Put simply, the Howey Test asks whether the value of a transaction for one of its participants is dependent upon the other’s work. Specifically, the Howey Test determines that a transaction represents an investment contract if ‘a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party’.
THE STO AS A COMPETITOR
TO THE CLASSIC IPO
(INITIAL PUBLIC OFFERING)
Players in the digital economy as well as from the venture capital scene are increasingly assessing security token offerings (STOs) to be an innovative and complementary way of financing start-ups, growth and even later-stage companies, notes Dr. Ian Maywald of Business Law Magazine. As a specialized form of fundraising, STOs often compete with venture capital and other forms of corporate financing. It has been observed that STOs target professional (or at least relatively sophisticated) investors. In theory, anything that is considered security today — including shares, bonds, warrants and profit participation rights — can be tokenized. As a result, STOs are considered to have huge potential. The Canadian Securities Exchange (CSE) is set to launch a groundbreaking new blockchain-powered platform that will enable securities to be traded, cleared and settled in real-time.
Following the successful completion of the BEE Cashback Home (BCH) ICO on 4 February 2019, our Security Token Offering will now start in July. Interested parties can contact us in advance. We will respond to your inquiry as quickly as possible.
A report about the completed ICO will also
be available on the website shortly.
1 BRE = $1,50
Fiat – STO starting from $75,000 | 50,000 BRE
CRYPTO – STO starting from 16,200 BRE ($24,300)
Accepted Crypto: BEE Cashback Home (BCH)
Investor Pool 1
Maximum 3 shares of 0.75% each = €840,000
TOTAL SHARE PARTICIPATION POOL 1 IS 2.25%
Includes BEE Real Estate Security Tokens (BRE)
Any person or corporate body (company, firm, organisation etc.) can be a shareholder.
It is possible to hold one share or all three.
Investor Pool 2
Maximum 100 shares at 0.01% each = €9,500
TOTAL SHARE PARTICIPATION POOL 2 IS 1%
Includes Security Tokens (BRE)
Any person or corporate body can be a shareholder.
It is possible to hold one share but also all one hundred shares
Security Token Offering
— Start: 1 June 2019
— End: 1 June 2020
Token: BRE (BEE Real Estate Token)
Soft Cap: $1,600,000
Hard Cap: $750,000,000