ICO market passed and crypto community preparing for new Era — Digital Securities Offering or simply STO. The amount of funds raised through ICO is less than $270m in November. This might be a sign that people don’t trust ICOs anymore. The next big stage of Blockchain is Security Tokens approved by regulators and more secure for investors. But for now it’s not so clear how new platforms will work, what exchanges will better adapt to to Security Tokens, and whether there will be a common Security Token standard approved by SEC and used by each project. There are more than 40 STO platforms for now, but most of them have some issues: in token standard, in platform, in features etc. So let’s look at them.
Most of standards allow investors and issuers to recover their accounts after losing private keys. In case of investor tokens will be transferred to his new address: some standards will do it by burning tokens from his previous address and minting to the new, some standards have managers or regulators, who will transfer it from his previous address to the new. In case of issuer it’s not so simple, because token may be tradable on the Exchange when the loss occurs and reissuance of new tokens will come as extra work for exchanges too. The bigger challenge occurs when issuers’ private key will be stolen, because unlike ICOs here issuer has more rights and power, like access to cap table, in some standards also access to transferring tokens from investor addresses or to changing regulator contracts and managers. Using these rights hackers may create chaos that then it will not work again to reissue tokens.