In the previous articles of our crypto cycle, we covered the topic of registering an entity and conducting a Virtual Financial Asset Offering - that is, a classic ICO as defined by the Maltese law. In this article, we will deal with its little brother, which is not coming off the lips of the crypto industry in recent months - STO. If we have decided to create a public limited liability company, this opens up the possibility of creating our own Security Token Offering - that is, in simple terms, selling shares in our own company, encoded in tokens. In the case of STO, the initial phase of the project will look very similar to VFAO - that is, we need to draw up a whitepaper, in which we will describe all the details of our intentions. The difference is the separation of STO types into public and private. This choice is very important for the costs incurred. Private STO Private STO is basically an offer of shares addressed to a closed, specified group of investors. It may be carried out both in a public and in a private company (however, it should be remembered that a private company has a limit of maximum 50 shareholders). In accordance with the European law (Directive 2011/61/EU) the offer may be directed to maximum 150 investors. It is necessary to obtain permission for it in the appropriate jurisdiction for the place of its creation (i.e. in our case Malta) and then inform the MFSA about the countries to which it will also be addressed. This is a good solution to stocenize your assets without having to spend a lot of money. The downside is the need to find investors before the issue is launched - which usually means a lot of time spent by project managers. It should be mentioned here that on tokens it is possible to encode not only shares in the company, but also bonds, the way of collecting remuneration for ownership. Everything is possible with the help of so-called "smart contracts", about which it is worth reading a separate article. Public STO STO public is, in the simplest sense, an actual public offering aimed at external investors based on blockchain technology. Despite the use of tokens, its process is definitely more like a classic stock market IPO - and it costs that much too. After creating a whitepaper and submitting our STO to a VFA Agent, Financial Instrument Test determines if our token will qualify as a security token. If this is the case, it automatically acquires the classification of a financial instrument under Maltese law and consequently, the process of issuing it is not regulated by the so-called 'cryptocurrency acts', but by the law on classical financial instruments. This requires us to create a real-life prospectus, as well as an issuance by a controlled authority licensed to deal in securities - which in the case of Malta is only fulfilled by the official Malta Stock Exchange. The cost of STO itself will fluctuate around PLN 600-700 thousand. Of course, regular work on popularizing STOs is moving forward - in the first quarter of 2019 an exchange created in cooperation between Malta Stock Exchange and one of the largest cryptocurrency exchanges on the market, OKEx, tailored to the needs of issuing instruments based on blockchain network solutions, is to be launched. For the time being, however, I recommend this form of capital raising only to companies with a very large market experience and sufficient capital. There is one more option: the amendment to the European directive on public issue prospectuses allows for so-called 'small public issue' without the need to prepare a prospectus. The maximum amount of funds raised then depends on the jurisdiction in which you want to carry out such an issue - in Poland it is one million euros, while in other European jurisdictions this amount reaches up to 5 million euros! Our accounting office does not only deal with the registration of companies abroad. One of our main goals is to support tax settlement of traders and miners. Especially for Bitcoin.pl readers we have prepared a discount -10% for crypto settlement - regardless of the number of transactions! Just contact us (we have many forms of contact) and give code "bitcoinpl" to one of our specialists. Author: Hubert Matecki, TAXO Accounting Office Tags what is hundred what is sto sto projects sto registration security token offering STO hundred investments hundred registration taxo
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