By the end of 2019, STOs had been used in multiple scenarios including the trading of Nasdaq-listed company stocks,[1] the pre-IPO of World Chess, FIDE's official broadcasting platform,[6][7] and the creation of Singapore Exchange's own STO market, backed by Japan's Tokai Tokyo Financial Holdings.
Similarly to ICOs, STOs are offerings that are made by selling digital tokens to the general public in cryptocurrency exchanges such as Binance, Kraken, Binaryx and others.
This way, even if the offering company understands their tokens are merely a utility asset with no expected return investment, if it can be proven otherwise then the ICO becomes an unregulated STO, passive of legal punishment.
Such companies include messaging apps Kik and Telegram, the former being sued by the SEC for over $100 million and the latter delaying their offering plans after similar prosecution.
[18] Such a lack of regulation has led to the rising of large-scale crypto-related criminal activity, ranging from terrorist funding to tax evasion, most of which go untracked and unpunished.