Security token offerings (STOs) have become a fundraising mechanism since the old days of hectic Initial Coin Offerings, which were ever so popular a few years ago but have since tarnished the Blockchain industry as many projects turned out to be scams.

Since the launch of STOs over the last year and previously, the Blockchain industry and world regulators have debated the classification, legality and appropriateness of STOs within the realm of securities and tax law, including the most basic question – is a token a security for all intended purposes? For example, in the US,  Commodity Futures Trading Commission (CFTC), IRS (Internal Revenue Service) and SEC (Securities and Exchange Commission) have yet to agree on a uniform classification.

Given this stalemate, projects and organizations around the world have taken a self-regulatory approach to classifying tokens. In the US, the Crypto Rating Council, made up of the leading Amercian exchanges and Blockchain firms has taken upon itself the task of classifying token assets as securities. In Japan, the Japan Security Token Offering Association has just been formed by leading japanese firms in an effort to promote adopting security tokens for fundraising.

This is a welcome sight that may help to advance the digital asset markets into the next phase, there they can satisfy local and federal laws without unnecessary scrutiny and advance such areas as tokenizing real estate and other commercial transactions.