Security Token Offerings

Security token offerings are proof of the positive impact emerging technologies may have on established and traditional methods of corporate finance. Through experience garnered through it’s active involvement in capital markets and the blockchain industry, novolegal has put itself in a prime position to advise and assist numerous projects throughout every stage of the STO life-cycle.
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What is a security token offering?

A security token offering (STO) is the public offering of transferable securities which have been tokenised in order to be operable and transferable on and through a blockchain. Malta as a jurisdiction of choice for conducting a security token offering could be said to be a result of the island’s efforts to regulate virtual assets, as is particularly evident through the Virtual Financial Assets Act.  It is to be noted, however, that a security token offering falls within the realms of ‘more traditional’ legal regimes relevant to financial instruments. In the latter’s respect, it is to be noted that the process relevant to a security token offering
comprises of similar requirements to other public
 and listings.

Why conduct a security token offering?  

The primary advantages associated with a security token offering could be said to be the following:

  1. Lower barriers to entry such as Know-Your-Client and Anti-Money Laundering compliance costs.
  2. The opportunity to expose the offer to a wide range of potential investors.
  3. Flexibility through the manner rights tied to the transferable securities are devolved and enjoyed by the
    token holders.

    How can novolegal assist?

    novolegal can assist through the carrying out of legal opinions to determine the accurate classification of the tokens being issued, drafting of the relevant offering document and other necessary documentation as well as liaising with the relevant authorities. We will offer guidance throughout the process to ensure that the clients achieve the aims they set out for, from classifying the token till the final launch of the Security Token Offering.

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