Security token offering startup, Blockchain App Factory, has reportedly landed a contract to tokenize real estate assets worth roughly $225 million. The startup revealed that the project belongs to three different real estate companies who are looking to raise funds for their project through the security token offering (STO) model.
According to a crypto news agency, CryptoVest, developers at Blockchain App Factory had just launched their STO platform which helps in tokenizing real-world assets such as real estate, venture capital funds, art projects or just anything that has value.
It appears that the real estate tokenization deal is one of the most prominent to be handled by the startup and could be the first of many to come.
Shifting From ICOs to STOs
The real estate companies have opted to raise funds through the STO model (rather than ICO), and Blockchain Factory App co-founder, Ramkumar Subramaniam, revealed why startups are now settling for Security Token Offerings (STOs).
“STOs' key focus is on the regulations' sphere, albeit, technology will also follow suit to help the industry thrive. Our team of developers with adept technical know-how has developed tokens that are regulatory compliant, across jurisdictions,” he said
The fact that ICOs are mainly susceptible to fraud and unregulated in many regions of the world makes the thought of security token offering a better option for both startups and investors.
Securities offered to investors through this fundraising model can be regulated under existing securities laws, thus, guaranteeing that investors can get a Return on their investment at the right time.
For startups, coming under some wave of regulatory protection can encourage members of the public to willingly invest in their projects which will be backed by real-world assets.