Initial Coin Offering, Security Token Offering

• Published date: 15 September 2021
• Law Firm: Kalo & Associates
• Author: Kalo & Associates

While the use of DLT-based financial services is rapidly transforming the whole picture of financial markets for both market investors and market infrastructure providers (payment systems, stock exchanges, trading venues, securities custodians, issuing companies), these raise specifically challenges for both regulators and market participants due to the uncertainty on how the existing regulatory framework can be applied toThe Law "On financial markets based on the technology of Distributed Ledgers", (the "Law") in additional to what we have explained thus far, also regulates two very important steps for the system organization and functioning, in particular the Initial Coin Offering ("ICO") and the Security Token Offering ("STO").

In simple words, the Initial Coin Offering is the cryptocurrency industry's equivalent to an initial public offering (IPO) whilst the Security Token Offering is a type of public offering in which tokenized digital securities, known as security tokens, are sold in cryptocurrency exchanges, or security token exchanges. The Law applies to STOs and ICOs issued by an issuer in or from Albania. An STO or ICO is considered to be launched in or from Albania, if the issuer is an...