Tokenization is one of the modern tech trends that is undergoing rapid development and widespread adoption right now. Together with Blockchain technology, it provides an opportunity to change the global economy, to make it more stable and advanced. Investments in tokenized assets, especially precious metals, have enormous potential and offer unprecedented prospects. 

Tokenized Precious Metals 

Tokenized assets exist on the digital plane in the form of tokens that are backed, that is, issued, on the basis of real physical assets. Tokens��are��created on blockchains (Ethereum, Cardano, etc.). You can learn more about asset tokenization��here.��

Tokenized assets are protected, so to speak, by the complexity of blockchain technology. Thanks to its general automation and transparency, it is virtually impossible to hack it, which means that it is impossible to steal and/or counterfeit a tokenized asset, which is more than a relevant problem for an asset as delicate as precious metals. 

Tokens funded by precious metals and issued through ICO/STO represent a kind of digital certificate of distributed ownership of this asset. Investors can claim a stipulated portion of the precious metal by buying these tokens. That is, with blockchain-based tokenization, gold/silver/platinum can be acquired and traded with a high level of protection and competence. The new service of �ԹϹ���, �ԹϹ���Crypto is ready to offer quality assistance in your token campaign. 

Benefits of Tokenized Precious Metals 

There are numerous advantages that tokenized precious metals can offer. We will name 3 of the most relevant ones for regular investors: 

1. It is no exaggeration to say that precious metals, namely gold and silver, have been used as an investment option since the beginning of time. Mankind has always had a soft spot for them. They have not lost their appeal even now, but modern technologies such as blockchain and tokenization offer a different perspective on the investing process in these assets. The above-mentioned tokenization of precious metals, in addition to all other manipulations, involves the creation of a smart contract. This digital document is highly secure, does not require the participation of third parties, and guarantees the fulfillment of the prescribed obligations. Thus, the first advantage of tokenized gold will be the absence of unreasonable costs thanks to smart contacts. It will be as easy to sell tokenized gold as any other asset or cryptocurrency.  

2. While there is a real danger of “getting caught by fraudsters” when buying regular gold/silver, in a similar transaction where tokenized precious metal is involved, this is literally impossible. Why? Because the tokenized asset’s characteristics and movement are constantly monitored and reported on the blockchain using RFID scanning of the precious metal. It sends data about the location of the asset and its properties to the blockchain. This way, the investor always has all the necessary information, which cannot be tampered with, about the asset when buying it. Defeating fraud is the second significant advantage that a tokenized precious asset is willing to offer. 

3. Blockchain tokenized gold/silver is stored in a secure place with all precautions, without being moved. At the same time, tokens backed with this precious metals can easily be traded without reference to place or time, in a decentralized manner.��Accordingly,��the third significant advantage of tokenized precious metals is��the��possibility to��increase liquidity by selling��the��gold/silver��to verified individuals around the world��regardless of one’s geographic location.��

Summary 

It is safe to say that the tokenization of real-world assets on the blockchain presents the greatest opportunities and the list of these very assets will only grow. As for tokenized precious metals — they will be the solution that investors who wanted to invest in gold, silver, or platinum have been looking for, for a long time. Tokens backed by precious metals can be bought not only at a fair price, but also safely, transparently, and without fear of fraud. 

�ԹϹ���Crypto��offers��comprehensive solutions for the tokenization of various assets. Reach out to our team and��start your tokenization project��already today!��

DISCLAIMER: A�Բ� legal, tax, or investment advice in this communication (including any attachments) is for information purposes only and is not intended to be used, and cannot be used against���ԹϹ�����or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation.���ԹϹ�����does not provide any legal/ investment/ tax advice itself.���ԹϹ�����works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.��

Classic cars or super sports cars (Supercars) along with real estate, precious metals, and stocks are considered a lucrative investment option. Year after year, entrepreneurs around the world invest in this asset. However, Supercars are a special asset that is, frankly speaking, quite expensive, only investors who have large funds can invest capital in them. For small or start-up businessmen, this kind of asset is simply unattainable.  

Now, with the development of blockchain-based asset tokenization, everything has changed. Presently, it is not necessary to have an impressive sum of at least six figures to invest in a classic automobile, it is enough to buy only a part of it for a modest cost.  

“It’s All about Tokens!” 

With the advancement of tokenization and Blockchain technologies, it became clear that these two tech trends have excellent potential, yet their combination is even more grandiose. Together they represent a force capable of reshaping the current world of finance and the global economy. They offer pioneering solutions to literally “move” assets from the real world to the digital one, preserving their value and all essential parameters. Furthermore, blockchain-based asset tokenization greatly simplifies the process of investing, eliminates middlemen and overall old-fashioned paperwork. 

Tokenized Classic Cars 

What is it, tokenization of Supercars? Basically, the supercar is digitized and this is done through the creation and issuance of tokens (digital units) on a blockchain (Ethereum, Cardano, and others) by dint of an STO (security token offering) launch.  

Below is a hypothetical scenario of tokenization of a $1,500,000 Ferrari collectible Supercar: 

A certain AutoAsset Group Ltd. buys high-quality cars with collectible value. These cars today are sold to 1 buyer only. With tokenization, the AutoAsset Group wants to purchase a Ferrari and sell to many hundreds of buyers using fractional sales via tokens. 

To set the best legal framework for this business model, the company will establish an AG in Liechtenstein, as Liechtenstein (and Switzerland) offers today one of the best legal frameworks for tokenization business models. A company formation in Liechtenstein and Switzerland can be supported by �ԹϹ���. And in detail, �ԹϹ��� can also assist in:  

• opening a bank account; 
• preparation of the valuation report; 
• programming of smart contracts on well-known blockchains (Ethereum and many others); 
• working with a network of lawyers to establish a legal structure in the crypto-friendly country, like Liechtenstein or Switzerland;  
• providing a white-label platform (with KYC / AML verification for investors) for further trading/exchange of tokens for FIAT money or other cryptocurrencies.  

Through tokenization, the Ferrari will be digitized into small parts and its $1,500,000 value will be transformed into 1,500,000 tokens (1 share = $1). To buyers wishing to purchase a piece of the tokenized Ferrari, those pieces will be available in packages x 5,000 tokens each. The smart contract includes a share certificate for the car, as well as an automatic annual incremental value payment (dividend). Further, each owner of the split asset participates in the development of the value and final sale price after 10 years.  

You can read more about the auto tokenization example on our website. 

Benefits of Tokenized Valuable Supercars 

Blockchain-based car tokenization has many advantages. Here are a few:  

• Investing in luxury cars is an industry in which there is no common systematization: cars are valued according to different indicators, and the circle of investors who have access to this asset is objectively small due to the high capital required to purchase a car. Tokenization of vehicles will provide more transparent schemes of asset valuation and due to the possible fractional acquisition will expand the pool of potential investors by far. 
• Due to the digitalization of the asset following the launch of auto-backed tokens and the use of blockchain, the possibility of errors is reduced to almost zero, as the human factor is almost completely eliminated. 
• Selling /exchanging car tokens, unlike old-fashioned vehicle trading, can be done 24 hours a day, seven days a week, plus it is not tied to a location, which also erases the problem of investors being dispersed by region. 
• Tokenization lowers the necessary capital threshold for investors wishing to participate in high-value automobile ownership. Because digital tokens can have a small face value, investors will be able to access this exclusive asset class with little capital. Once tokenized, even 1% of an expensive machine can be purchased. 
• The tokenization of Supercars offers solutions to eliminate the role of financial intermediaries such as banks, insurers, notaries, etc. They will simply not be needed due to the composition of the necessary smart contact when issuing tokens. Smart contracts are existing in a blockchain computer code that ensures the automatic execution of agreements between users without interference. Because smart contracts operate in a blockchain environment, these algorithms cannot be changed once launched. 

Bottom Line 

Tokenization of the car is a time-consuming and extremely creative process since each tokenizing project is different and highly individual. Therefore, those who are interested in issuing tokens backed by an expensive car should seek help from specialists with sufficient knowledge, experience, and creative thinking. 

�ԹϹ���’s new service, �ԹϹ���Crypto, offers structured and qualified assistance in the tokenization of various assets, including collectible vehicles. Check out an example project of Ferrari tokenization with �ԹϹ��� on our website. You can contact our team to learn more about the new service and its functionality. 

DISCLOSURE NOTICE:����Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be used��and cannot be used against �ԹϹ��� or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation. �ԹϹ��� does not provide any legal advice itself. �ԹϹ��� works together with a network of lawyers and tax advisors that provide all necessary individual legal advice. ��

Investing in real estate has always enjoyed great popularity and is often recognized as one of the best ways to increase capital.  

Tokenization using blockchain technology will soon bring real estate investments to a completely different level, and take it to the digital era. It will create efficient mechanisms to increase the liquidity of real estate, simplify the procedure of buying, maintaining, and selling the property. What is also important, is that the buying group changes dramatically: tokens can be offered to a much larger international investor group. Also, assets can be divided into smaller assets parts and therefore investors with a smaller budget also have the chance to partake in large projects that were previously inaccessible because of high capital requirements. 

Tokenization of Properties: Peculiarities 

Real estate tokenization is the “transfer” of real estate assets from the real world into a digital format, preserving all of their significant indicators (value, class, and profitability). It is done through the creation and issuance of smart tokens (digital units) on a blockchain (Ethereum, Cardano, and others) by dint of an STO (security token offering) launch. In turn, these originated tokens may be of different nature and purpose. Thus, they can be equal to: 

• Equity in real estate; 
• A share in a company that holds the property; 
• A claim secured by real estate; 
• The right to a part of the profit generated from the real estate ownership, and others. 

Any type of real estate can be tokenized, both residential and industrial. As of now, there are several property tokenization mechanisms, among them are: 

• Ownership of real estate through an equity interest in a specially created (vehicle) company; 
• Equity in a real estate fund; 
• Equity participation in a real estate property; 
• Investing and lending for real estate development; 
• Creation of tokenized real estate investment funds. 

The technology itself is extremely promising and experts worldwide confidently call it the tech trend of the future, which will redraw the whole global investment market. It will relieve investors from hateful paperwork and expand the pool of possible investors as such. 

Advantages of Real Estate Tokenization 

Tokenization of any kind of asset is a promising and offering great opportunities tool. If we talk about tokenized real estate advantages, we can specifically highlight the following points: 

• Overall flexibility   

One of the notorious advantages of tokens is their flexibility. When a property is tokenized, it can be digitized for later fractional sale or exchange. This also allows investors with little capital to enter the market. That is even an entrepreneur with little funds can invest in a tokenized property and become its partial owner obtaining dividends from the potential earnings. 

• No geographical boundaries or restrictions 

Tokenization of property tools literally erase geographical boundaries in the investment world, thereby expanding the pool of investors and potential targets for funding capital. All activities take place in the digital format, thereby providing the opportunity to invest in tokenized real estate on a global scale at any time convenient for the entrepreneur. 

• Cost optimization 

When tokenizing a property, it is possible to significantly reduce the typical organizational costs of conventional real estate investing, such as notary fees and bank fees (paying for your property in cryptocurrency helps you bypass them). Plus, the procedure is completely automated and eliminates redundant red tape formalities. 

• Possibility of high diversification of the investment portfolio 

Nowadays, to participate in a luxury real estate investment project, for instance, an investor needs to have quite large funds at their hands and pay out a big amount at once. However, thanks to tokenization, it will no longer be necessary to buy the entire property and give a large amount at once, because it will be divided into tokens. This or that property can be split into hundreds or thousands of tokens with a designated value. That is, you can purchase only a small part of this or that house, office, warehouse, etc. It, in turn, means that you can do it with several properties, thereby adding variety to your investment portfolio. 

• Exclusion of intermediaries 

Thanks to smart contracts prepared in the process of tokenization of assets it is possible to excrete the intermediaries such as notaries, brokers, etc. 

Smart contracts are computer code that exists in a blockchain that ensures the automatic execution of agreements between users without interference. Because smart contracts operate in a blockchain environment, these algorithms cannot be changed once launched. 

Final Thoughts 

Tokenization is a fairly complex process from a legal and technical standpoint. Companies/entrepreneurs interested in launching tokens upheld by real estate face a wide range of challenges in preparation, designing, originating, and promoting real estate tokens. This is why those who have the intention of starting their token project should trust professionals who have the necessary skills, knowledge, and resources to do so. �ԹϹ���Crypto is the new brainchild of our company which was created for this very purpose — to provide professional qualified assistance in launching your token campaign. Visit our website to find out more. If you have any questions, please, be free to contact us immediately. 

DISCLOSURE NOTICE: Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be��used, and��cannot be used against���ԹϹ�����or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation.���ԹϹ�����does not provide any legal advice itself.���ԹϹ�����works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.��

Life in the era of pervasive digitalization presents us with more and more promising areas of business that, until recently, seemed either fantastic or difficult to bring to life. One such field is the tokenization of assets on a blockchain. It is rapidly evolving and gaining loyal followers who use the technology actively. In order not to be loud and back up what was said above, it is worth mentioning that reputable organizations such as WEF and McKinsey predict that the value of tokenized assets will be equal to nearly $24 trillion as early as 2027. 

Those entrepreneurs who think creatively have already realized the tremendous promise of the tokenization of assets on a blockchain and are eager to “jump on board”. 

�ԹϹ��� always keeps up with the times and offers only relevant and highly effective solutions for businesses. We are happy to announce that our company launches a new service — �ԹϹ���Crypto. This new service aims to assist entrepreneurs and investors wishing not to miss a great opportunity to join the forward-looking market of tokenized assets. 

What is �ԹϹ���Crypto? 

�ԹϹ���Crypto is the new member of the constantly growing �ԹϹ��� service portfolio. It offers practical solutions for the successful tokenizing of real-world assets like real estate, fine art, precious metals, classic cars, and many others. 

The team of well-versed specialists will be glad to provide you with the following services: 

• Support in developing an ICO or STO strategy suitable for your particular case.
• Assistance in forming the appropriate legal entity for the ICO or STO.
• Support in competent drafting of necessary smart contracts on different blockchains (ETH, Cardano, etc.).
• Provision of a fully functional, quality White Label Token Platform with customized software. The Software offers KYC and AML compliance onboarding process for all investors as well as a system to buy token with FIAT or crypto money. 
• Secure token trading through a white-label platform in crypto-friendly countries.

Tokenization of Assets with �ԹϹ��� 

When applying to �ԹϹ���Crypto services, you can count on the well-thought-out process of tokenization of your assets. The whole procedure looks like this: 

• Project Planning 

Together with a client we thoroughly review their potential token issuance plan, its perspectives, and possible drawbacks. 

• Incorporation of the company for the token release 

The �ԹϹ��� team assists in forming a legal entity to launch an ICO or STO. We offer support in Liechtenstein and Switzerland.

• Token development 

Specialists with extensive experience take on the programming of a token on a blockchain of your choice. (Ethereum, Cardano, Polkadot, and many others). 

• Token listing 

We offer a custom white-label software platform to scrutinize investors (KYC/AML) and sell tokens with FIAT/cryptocurrency. The KYC procedure (translated as “know your customer”) is designed to classify and verify the identity of each potential investor. The verification is done before they can conduct any financial transactions. This protects companies/entrepreneurs from the risk of working with fraudsters and ensures the safety of clients’ assets. AML policy means anti-money laundering. It includes a broader set of measures than KYC, such as transaction monitoring, risk assessment, and bank card verification, etc. We use both identity procedures because we value the safety of our customers. 

With �ԹϹ���, after the accomplishment of the comprehensive work, your token can be listed for a private sale in your white label platform in as little as 2-3 months. If you want to make your token public, we’ll help you list it at different known crypto exchanges.  

Other cool perks from us:  

• Qualified specialists that have experience in the Crypto Projects; 
• Professional technical team that would do programming on the blockchains as Ethereum, Cardano, Polkadot, etc.; 
• Individual approach to each customer. 

Pricing 

�ԹϹ��� is always honest with its clients and tries to present information about its services and fees in the most transparent way. However, the tokenization of assets is always a very individual project that depends on many variables. Therefore, it is hard to name the exact cost beforehand. To give you an idea, we build an example of a token project with company incorporation in Liechtenstein as a reference case: 

• Forming an AG company in Liechtenstein will cost 6,500-10,000 EUR (a one-time fee) plus share capital of an AG: 50,000 CHF; 
• Registration according to TVTG will cost 25,000-35,000 EUR (a one-time fee) plus 5,000 CHF registration fee; 
• Preparation of the securities brochure will cost the client between 35,000 and 45,000 EUR (a one-time charge) plus the approval fee of 5,000 CHF; 
• Development and customization of the White Label Token Platform will cost 25,000-35,000 EUR (a one-time payment, depending on the required functionality);
• The cost of a license varies from 1,200-2,500 EUR/month (depending on the token project). 

Bottom Line 

It is the �ԹϹ��� philosophy to add more and more services to our platform and bring a real experience to internationalization as a service. By creating the new service �ԹϹ���Crypto, we now have a very state-of-the-art service that provides an effective algorithm of actions and protocols for the most successful tokenization of assets on the blockchain. 

DISCLOSURE NOTICE: Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be��used, and��cannot be used against���ԹϹ�����or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation.���ԹϹ�����does not provide any legal advice itself.���ԹϹ�����works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.

Back in the day, in the digital world, tokenization was first used as a means of replacing sensitive data (credit card data) with a digital equivalent — token. It was accomplished by TrustCommerce in 2001 as a means of protecting the credit card information. This made payments and transactions more secure and protected them from data leakage and/or hacker attacks. Thus, tokenization has been successfully used for 2 decades already but who knows that? 

The trouble is that the general public isn’t familiar with tokenization well enough and doesn’t have a clear idea of what it is, what this process is for, and so on.  

BUT: Tokenization has grandiose prospects to offer. Therefore, let us get acquainted with it. At its core, tokenization is the replacement of a real asset (credit card data, real estate, commodities, fine art, classic cars, precious metals, and many others) with its digital equivalent — token through various methods.   

To make it easy to understand how the concept works, let’s look at casino chips that everyone is familiar with. The chips themselves have no real value unless they are exchanged for money, that is, they represent the asset behind them. This is also the case with tokens, they provide a safe way to possess assets.  

The year 2001 is long gone, and tokenization has not stood still all this time but is constantly evolving. Today, together with blockchain technology, tokenization opens up staggering possibilities.  

Tokenization and Blockchain  

Blockchain technology is a data system owned by everyone and no one at the same time. It contains an online list of transactions. This list is continuously copied to the databases of countless computers within the so-called classified registry system. This approach makes cheating and data theft/substitution impossible. Blockchain consists of “blocks” that are continuously added to the chain. These blocks can be thought of as permanent pages of the file. Once information is added (a block is attached), no changes can be made to it without the knowledge of the other participants.  

While tokenization is an incredibly valuable tool for defending payment card info, when coupled with blockchain, it converts to an even more powerful one and acquires new features. After Ethereum, Cardano, and similar were invented, it became possible to model entirely new tokens based on them. And blockchain technology, in turn, provides a record of token issuance and continuously monitors its “movements”. 

The tokenization market is booming at the moment while having a significant impact on the global economy as a whole. The global tokenization market is expected to grow from $1.9 billion invested in 2020 to $4.8 billion by 2025, at an average annual growth rate of 19.5% over the forecast period (). There is a logical explanation for this. The fact is that the tokenization market is constantly pushed forward by the universal need to improve the quality of customer service, the provision of simple and straightforward compliance algorithms, and the widely recognized benefits of Blockchain technology (reducing the risk of fraud/theft of data to zero). 

What Spheres Tokenization Is Applicable In  

Tokenization has enormous potential. Here are just a few examples of the spheres in which it can be successfully applied:  

• Real estate investments  

The real estate market is immense and expensive; beginning investors find it difficult to get involved in serious projects because of the capital required. Asset tokenization will allow anyone who wants to acquire a certain piece (token) in a particular project to do so.  

• Asset management  

Asset tokenization allows them to be split into smaller pieces, giving interested investors the opportunity to purchase even a part of a single share if it is tokenized.  

• Contracts  

Tokenization of the contracts allows information to be tracked and stored online and shared without the risk of data leak/theft/substitution. Also, it eliminates the necessity for third-party assistance.  

Benefits of Tokenization  

• Safety  

Due to the nature of blockchain technology, when a token is created, a registry entry is designed in the form of a unique code. Thus, one is unable to hack or steal it.  

• Productivity  

Asset tokenization allows you to enter into transactions without all the hated red tape since all the necessary information is stored in a smart contract. This, in turn, affects the speed of transactions.  

• Flexibility  

Another advantage of tokens is their flexibility. For example, when a picture is tokenized, it can be digitized for later fractional sale or exchange. This also allows investors with little capital to enter the market.  

• Convenience  

In the past, the vast majority of transactions required the physical presence of the parties to the agreement to complete the transaction, but with smart contracts, you can sell and buy assets anywhere and anytime.  

Final Thoughts  

Developing relentlessly, tokenization has come a long way since its first implementation in 2001. Today, combined with blockchain technology, it is ready to open up a new era in the evolution of the digital world’s potentialities for investment.  

One thing is certain: tokenization is just beginning to gain momentum and explore the potential application ways.  

�ԹϹ��� is a digital platform providing relevant services for businesses. We always try to provide the most necessary and on-demand services to make your company prosper. One of our new services to come is �ԹϹ���Crypto. By dint of this service, a customer will be able to take advantage of the multiple options of tokenization assistance.   

�ԹϹ��� will share its experience in ways to tokenize assets and is ready to help with registering a business entity in crypto-friendly jurisdictions to issue tokens. More detailed information about the �ԹϹ���Crypro Service is given on our website. If you are an early bird and interested already, please, feel free to contact us and our Crypto-Experts will get back to you in a blink of an eye. 

DISCLOSURE NOTICE: Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be��used, and��cannot be used against���ԹϹ�����or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation.���ԹϹ�����does not provide any legal advice itself.���ԹϹ�����works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.

Introduction 

Since its inception, an ICO (initial coin offering) has provoked different opinions from investors. While some eagerly jumped at the new opportunity, others were skeptical of the concept. Mainly, investors were confused by the lack of regulation of the ICO process and legal security when participating in initial coin offerings.  

However, things are changing. With the development of the crypto business, there is a more reliable solution for founders and investors to make token-based investments legally secure and that is an STO (security token offering). This article will try to understand the main differences between these two strategies and what benefits investors can get from participating in the ICO and STO. 

From ICO to STO 

Over the years, the ICO instrument has proven to be an effective way to raise capital, although it has some drawbacks regarding the legal security of investors. To correct them, a newer and safer tool (STO) is designed. In contrast to the ICO, this procedure is regulated and has the necessary transparency. 

It is an evolutionary step on the way to crypto business development thanks to the participation of the central authority. STOs are controlled by the U.S. Securities and Exchange Commission (SEC) and alike bodies in other countries, requiring registration. With STOs, “tokens” lead to legal liability for the business issuing them and link to the company’s financial performance and structure. 

STO vs. ICO: Differences 

The STO is the sale of a company’s shares to investors under the guise of a tokenized asset. By buying a token at the first stage of an STO, the investor actually becomes the owner of a share in the startup. An analogy can be drawn here with regular shares traded on the stock market.

The STO does not always use blockchain, because the tokens distributed by this method are, in fact, ordinary shares. Finally, there is the main advantage of STO — because tokens are considered to be shares, crowdfunding is carried out under the strict control of regulators such as the Securities and Exchange Commission in the USA. 

ICOs are not always the focus of regulatory scrutiny. They are designed for ordinary investors who fit a number of standardized criteria. For example, participation in a crowdfunding company is usually possible for people from a limited number of countries who have confirmed their identity through the KYC procedure. That is, for those who have shown their documents. 

In the long run, STO has a much better chance of remaining a popular way to raise money, as it is more to the liking of financial regulators. The SEC has begun to closely monitor the crypto market, with the Commission de facto treating all tokenized assets as securities. Even companies that used to succeed with ICOs now face financial sanctions from the regulator. 

ICO and STO Present Diverse Types of Tokens 

The ICO involves the issuance of tokens, let’s call them “classic” (payment and utility mainly) tokens. Regulators SEC (USA) and FINMA (Switzerland) proposed a classification of issued tokens: 

• Payment Tokens — platform payment tokens, a currency within a startup that allows it to receive some kind of product offered by the developers. 
• Utility Tokens — tokens offering benefits. They are needed to get additional options of the platform, they are auxiliary. 
• Security Tokens — tokens of security or tokenized securities.      

The first two types of tokens are not regulated, the third type (STO) is. Security Tokens are digital assets subject to federal securities laws, something in between “classic” tokens and financial products. They certify ownership and entitle the owner to realize investment goals: a percentage of profits, dividends. The rights are recorded in smart contracts, and the tokens themselves have the right to be traded on exchanges. 

Benefits of Tokenization 

Tokenization refers to the process of transferring ownership of assets into blockchain-based tokens. This allows the use of bitcoin and many other technologies while preserving all the characteristics of physical assets. 

There are a huge number of assets in the world, among which the most common are: 

• real estate; 
• oil and cars; 
• precious metals and diamonds; 
• stocks. 

Since most of them are difficult to translate physically, parties in transactions prefer to exchange documents granting ownership of these assets. The problem is the complexity of this process, both technologically and in terms of control. One solution to the problem is to switch to a token-type system, but with a link to an asset. 

The Best Countries to Launch an STO 

Australia

Australia is one of the first countries to officially create rules for initial coin offerings, and soon many start-up fintech companies will be able to operate without the need for a license. The only disadvantage of this jurisdiction for ICOs can be rather high tax rates. 

Registering an STO company in Australia and obtaining an Australian cryptologic license can be a good option for starting an international business.  

The British Virgin Islands (The BVI)  

The British Virgin Islands (BVI) is by right considered a leading offshore tax haven for international business. The country pays special attention to the development of the financial and technological sectors. Entrepreneurs from all over the world are attracted by the country’s flexible tax policies. One of the largest cryptocurrency exchanges, Bitfinex, and its subsidiary, Tether, are located in the BVI. 

Canada 

In February 2018, the Canadian Securities Exchange (CSE) made an announcement that it planned to launch a new security token platform based on the Ethereum blockchain. This move marked the beginning of a new period in the existence and regulation of STOs in Canada. It should be noted that the epicenter of all events related to blockchain and cryptocurrencies in the country is Toronto. Vancouver is not behind the latter and is an attractive place for blockchain companies. 

Cyprus  

Cyprus is one of the most cryptocurrency-friendly jurisdictions in the world. The popularity of digital money on the island is such that the University of Nicosia became the first university in the world to accept tuition fees in Bitcoin.  

Cyprus has one of the lowest corporate taxes in Europe and the world at 12.5%. While maintaining low tax rates, the country is also a member of the EU and is on the EUCD “white list,” which makes it highly reputable in terms of transparency and stability. 

Dubai 

Ever since the Dubai Multi Commodities Center – DMCC began promoting the cryptocurrency market, Dubai is a great place to do crypto business. DMCC is a member of the Global Blockchain Council. At the moment, cryptos and ICOs are not fully regulated in Dubai. But the state authorities of the jurisdiction consider the issue of virtual currencies as one of the most promising and relevant. 

Estonia  

In this state, cryptocurrency refers to alternative means of payment. Estonia is one of the few states in Europe with a friendly attitude to ICO/STO activities. Here, the international business of primary issuance of coins receives favorable conditions with flexible taxation. Crypto activity licenses are issued by the state body EFSA (National Regulator of the Republic of Estonia). The country’s authorities have adjusted benefits and incentives for the ICO projects. 

Malta  

Malta is a premium hub for financial technology. This has been facilitated by the passage of legislation regulating cryptocurrencies, ICOs/STOs, and related activities. The jurisdiction has even been nicknamed Blockchain Island. Malta’s regulatory framework has the right balance between protecting consumer rights and promoting technological innovation.  

Malta is home to the main and subsidiary offices of significant cryptocurrency exchanges as Binance, for example.  

Singapore  

Singapore is one of the financial centers of the world. STO activities are profitable and promising here. Cryptocurrencies are legally exempt from the standard 7% tax under the country’s Goods and Services Tax (GST) system but are subject to income tax.   

In addition to established regulators and favorable taxation, Singapore is notable for the high prestige of local crypto companies. The jurisdiction was one of the first to create the most comfortable environment for STO-related activities. 

Switzerland  

ICO companies in Switzerland are subject to a number of laws that regulate crypto-activities. Some of the cantons have more favorable conditions for this business.  For example, the canton of Zug is even called a Crypto Valley. Among the advantages of the jurisdiction to start an ICO/STO: low taxation, the stability of the banking system, and excellent business reputation among other countries. 

The USA 

One of the safest places for investors to participate in STOs is the US jurisdiction. This is possible because of the SEC, one of the toughest regulators in the world. In addition, the USA has an extensive legal framework for securities (including security tokens) and a large body of case law (Delaware). 

�ԹϹ��� is always on the side of progress and digitalization, so, we offer assistance with the remote incorporation in the following Crypto friendly jurisdictions:  

Australia / The British Virgin Islands / Cyprus / Estonia / Georgia  / Germany / Hong Kong / Malta / Singapore / Switzerland / the USA  

Summary  

Across the globe, there has been a surge in the number of businesses wanting to conduct STOs. Many states are in the process of adapting their legislation to the demand for transactions in virtual currencies. Financial regulators in various countries are still evaluating whether and how to regulate the cryptocurrency industry. Because of this, it is difficult for entrepreneurs to determine where it is profitable to launch an ICO or STO project, but our experts are here to help!  

�ԹϹ��� can provide support for the company incorporation in some of the most crypto-loyal countries for those who want to try their hand in STO. 

In addition, �ԹϹ��� offers a state-of-the-art White Label Solution to start your Crypto Project.

Disclaimer: Please be informed that �ԹϹ��� does not advise or recommend investing in cryptocurrencies or similar digital assets. The Crypto market is very volatile and it might lead to a full loss of the investments taken. Any legal or tax advice in this communication (including any attachments) is for information purposes only and is not intended to be used, and cannot be used against �ԹϹ��� or its Sender. The sender is neither an Accountant nor a Lawyer and cannot be made liable. Please, contact your tax accountant for individual consultation. �ԹϹ��� does not provide any legal advice itself. �ԹϹ��� works together with a network of lawyers and tax advisors that provide all necessary individual legal advice.