On December 19th 2019, Stratis announced the launch of its security token platform. The company previously built a platform to launch Initial Coin Offerings (ICOs). Yet with the decline of the ICO and the rise of the STO, Stratis has followed the blockchain industry’s transition.
Stratis’ Security Token Platform Explained
Stratis claims to be an enterprise blockchain platform. Based in the United Kingdom, Stratis previous built a platform that businesses could use to launch ICOs. It was launched in May of 2018.
Now, Stratis has adapted its ICO platform to account for the regulatory requirements seen in security tokens. The company says it is in talks with several clients who are in ongoing discussions with the U.S. Securities and Exchange Commission (SEC).
Regarding the platform’s launch, Stratis CEO Chris Trew says,
“We are delighted to launch our STO platform, one of the key milestones of our 2019 Development Roadmap. The STO platform builds on the functionality of the Stratis ICO platform with the addition of several new features that satisfy the rigorous regulatory requirements needed to conduct STOs. Our STO Platform is highly secure, flexible and scalable, making it easy for businesses of any size to raise money through the tokenisation of their assets.”
The company says the platform is compliant with existing Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. It ensures compliance through a unique ID-based token issuance system. Each user creates a unique ID which helps token issuers understand who they sell tokens to.
Other features include payments accepted in both fiat currency, the USD, as well as BTC and STRAT. Real-time pricing is leveraged through CoinMarketCap and CoinGecko. The platform also utilizes wallets instead of autonomous smart contracts, for added security.
Stratis says it already has one STO lined-up and nearly ready to launch. Gluon, a platform that uses IoT devices to connect vehicles and respond to operational issues, is planning to conduct an STO via Stratis in 2020. Gluon has been working closely with the SEC to fulfill the necessary requirements in registering its GLU token with the commission.
The Ongoing Transition from the ICO to the STO
It’s not just Stratis who is transitioning from the ICO to the STO — it’s a number of entities. In differing from the ICO, the STO is an official offering of regulated securities, and therefore must feature compliance with the appropriate regulations.
While the ICO was used by hundreds of companies to raise billions of dollars, it came to a crashing halt once regulators entered the scene. There are laws and regulations when it comes to raising capital, which the ICO largely curtailed.
Now, out of a concern for regulatory compliance, companies are leaving the ICO behind and turning to STOs when raising capital via blockchain-based assets. Yet in addition to replacing the ICO, the STO is also beginning to enter the realm of traditional securities. Regulated assets such as equity, real estate, investment funds, and even fine art have been tokenized. So far, the nascent security token industry has been used to raise nearly $1 billion — all in a compliant manner.
What do you think about Stratis launching a platform for STOs? We’d like to know what you think in the comments section below.
Image courtesy of Stratis.