During Waves Blockchain Day in Warsaw, our interlocutor, Sasha Kolupaev, led the presentation about Security Token Offering (STO) and its future in the blockchain space. We did not try to hide our interest in this topic, so we decided to interview Sasha.
ICObrands : Hello Sasha, I wanted talk to you about ICOs and STOs. Do you think, that we’re having ICOs era ending now? What I mean is, after the 2017’s bubble on them everybody will think, that it does not pay to invest in them anymore.
Sasha : Well, ICOs did a lot of damage to the blockchain space and people are still in pain from their investments. The only way I see this moving forward is working with regulators and doing everything in the complied and legal way. And of course it will take time, because regulators are slow and also because people still have really bad aftertaste after the ICOs.
I : Malta works on these regulations, so maybe it will make people believe, that ICOs may become great way to raise funds for their projects again.
S : In general, ICO is not made for an investment. Most of the ICOs pretended not to be an investment contract. Obviously, everyone who invested in 2017 did it to make money, to speculate. Projects and companies were saying that the tokens were realeased to be used on their platform. But everybody knew, they were not.
I : Well you’re right, this happened especially to the new people in space, not the “old players”. Do you think, that STOs will replace ICOs? They will make people go crazy, just as ICOs did?
S : I don’t think so, because the nature of the instrument is very different. To participate in the legal STO, you need to be an accredited investor. So, there won’t be situation, where every single person will be able to invest or you know, lots of people without financial education and background will throw their money in it. STOs will raise the quality of investors. If they participate in them, they will have to be financially educated and also they will have to comply with the laws. To run the STO you need 700 000-800 000 $, so I think most of the STOs will be structured in a way, that there’s gonna be minimum threshold with which you could participate. Remember, the costs of the legal STO have to be covered in someway.
I : So, the ICOs will still exist in the blockchain space?
S : They will exist in one way or not, it’s just gonna be different. For example, from the top of my head, let’s say you have a project that does the STO. They raise funds. These funds are used to build a product, they are legally applied to build the product. And then the project issues ICO to distribute tokens, to use the product. So it’s gonna be different. Not ICO, then product. Firstly product, then ICO.
I : We all hope it’s going to be that good as you’re saying. Thank you for the interview and wish all the best to the Waves project.
S : Thank you as well.