As of June 4th 2019, TradeCloud has announced the launch of the private round of its Security Token Offering (STO).
TradeCloud’s Security Token Offering (STO) Explained
TradeCloud is a physical commodity trading platform which uses blockchain technology to enhance trade execution.
Having launched in 2017, the Swiss platform claims to have 500 users in over 35 countries.
Now, TradeCloud is launching the private round of their Security Token Offering (STO). A public round is expected to launch July 1st 2019, with a total of 25 million tokens offered for approximately $20 million between the two rounds.
According to Matthew Botell, TradeCloud COO, “the token holder will receive a profit share from the company”.
The company also claims to have cleared all regulatory and legal hurdles.
Simon Collins, TradeCloud CEO, says the funding will help the platform digitize the full trade cycle of commodities:
“The TradeCloud platform provides unparalleled market access for our customers. It facilitates efficient price discovery and optimal allocation of today’s scarce resources. By combining the current functionality with blockchain technology via The TradeCloud Commodities Web, we are well on the way to digitalising the full trade cycle.”
Are Security Token Offerings replacing the Initial Coin Offering?
With increased regulatory enforcement, a growing number of enterprises are leaving the ICO behind and turning to the STO as a compliant means to raise capital.
Earlier this week for example, the US Securities and Exchange Commission (SEC) charged Kik with conducting an illegal securities offering, referring to its 2017 ICO which raised $100 million.
The SEC has also charged other ICOs, exchanges, and even custody solutions with securities violations.
In fact, SEC Chairman Jay Clayton has publicly stated how nearly every ICO he has seen, constitutes a securities offering— with the one clear exception of Ethereum.
As a result of such a landscape, ICOs currently raise 58 times less than they did at this time last year, while STOs saw a 130% increase in Q1 2019.
What do you think of TradeCloud’s STO? Will the STO go on to supplant the ICO? Let us know what you think in the comments section below.
Image courtesy of TradeCloud.