The Thai Securities and Exchange Commission (SEC) has been looking at legislation to legalize ICOs in the country, opening up another source of funding to startups that the country is hoping to bring to its shores.
The Thai regulator however declared that any STOs offered within the domestic market were illegal to offer to overseas markets. The SEC would take action against firms that made any attempt to distribute STOs created in Thailand to international markets.
The reason given, according to the Deputy Secretary of the Thai SEC, was that the SEC had not yet decided where STOs stood with regards to the law. They could fall under either the SEC Act or the Digital Assets act, depending on the conditions of the STO and details found in the white paper of the STO. That would then regulate issues such as share ownership, voting rights and details surrounding dividends.
STOs importance as vehicles of foreign investment
There have been many major venture capital firms that have been active in the STO market over the past year. These large firms have bet big on the liquidity and fungibility that security tokens might potentially possess. Andreessen Horowitz and Peter Thiel’s Founders Fund have both been noticeably involved in STOs markets particularly.
Harbour, a company that raised $28 million from Andreessen Horowitz said that they had not received any negativity from any regulators or government agencies in the last few months. This comes directly from the CEO, who goes on to say that this is due to a well-structured token that regulators and other bodies can easily understand.
He added that since STOs were strictly regulated investment vehicles that always fully comply with local regulations, governments took regulation of the assets more openly than with digital assets that were not part of any existing legislation.
This shows how different STOs are from other coins that many founders only had plans for online trading in various unregulated exchanges around the world. While there have been regulations coming in around the world, and it is much easier to buy Bitcoin at the moment, STOs were on another playing field entirely.
STOs represent real assets
Assets that are involved in STOs are always real-life, tangible assets. These assets are easily approved by authorities due to the knowledge already present to value them. STOs merely allow a cryptographically signed representation of proof of ownership. This, in turn, allows the base asset to have better liquidity and fungibility.
Assets such as properties and artwork can in this way be represented by a token on a blockchain network that is cryptographically protected. This allows investors, ho would otherwise never have access to certain asset classes, to get in on the action to put in layman’s terms.
The fact that a security token can represent a minor part of an existing asset means that investors are more likely to buy into something they believe in considering they do not need to raise the money to buy the entire asset outright.
The allure in this is shown, particularly among millennials. Research has shown that since 2017, this generational group, in particular, has increased the investment base for all sort fo cryptocurrencies and is the perfect group to look at security tokens as a viable investment. Since many have trouble buying properties among other physical assets, the appeal is certainly understandable.