ICO or initial coin offering is one the easiest ways to raise money, without the bureaucracy of banks. People can contribute or invest directly in projects using popular cryptos like bitcoin or ethereum.
But this has some problems: scammers use ICO to take your money away. A fancy webpage with a well written whitepaper could be enough to trick people.
Even honest projects can face legal issues in their home countries.
Security tokens (STO)
In my opinion, security tokens are ICOs that meet the legal criteria to be considered as a "security". I guess that the definition of "security" will be different depending on the laws of every country.
According to this a STO brings the project owners the possibility of running their business under a legal framework, while an ICO that is not legal compliant may be subject to fines or possible shutdown.
The legal topic is tricky but it is important to take into account because it will impact your money.
This tricky topic could be a good market for legal firms which can deliver advise about STO and other blockchain topics.
In my country this topic is "rare" or even "sci-fi", but I guess other countries already have a legal framework for STO.
What do you think?