As a result, security tokens, like any securities, are subject to government regulation. Security tokens, however, provide equity or a claim to dividends from a company. Utility tokens, such as Waltonchain, give you access to a token’s network and are far more common than security tokens. In 2017, ICOs raised over $1.2 billion in funding by selling either utility or security tokens. Due to the continuing government crackdown on initial coin offerings, Polymath hopes to instead provide legal Security Token Offerings. All transactions on the Polymath platform take place using the native POLY token. In order to launch a legally compliant token, the Polymath platform brings together issuers, legal delegates, smart contract developers, KYC verification, and a decentralized exchange. Therefore, token issuers don’t need to worry about the legal implications of your security falling into the wrong hands. It makes a new token standard, the ST20, and enforces government compliance. Only a “ list of authorized investors and their Ethereum wallet addresses” can hold ST20 tokens. Polymath simplifies the legal process of creating and selling security tokens.
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