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STOs: The Dangers, Downsides, and Hidden Costs

8 min read

The security token offer (STOs) has recently been very angry, but despite their popularity, they are not saved to indicate salvation. Of course, the STO has a place in the world of basket offering, but the style of stroke in the industry stinks that both investors and investors are dangerous to ignore their potential discrimination and negative risks. As dangerous.

Missing money

One of the most interesting benefits of the STOs is that the fair payment guarantee for the transaction holder is targeted to profitable payments. While it can be true compared to the utility token, where there is no guarantee of the token holder, it leaves some extra complications.

Income-based profits are very funny. My main career is in background accounting, and I can tell you that at least zero to infinity can be zero. For example, in many options, if there are tickets that you use on your books that have not yet been released or suspended, they can be considered outstanding and can be marked in the market. So that you can get rid of the tax loss from the thin air.

The only way to deal with the difficult code is that they are based on the company’s total income. The way to distribute revenue is this “top cream” when companies transmit in cryptocurrencies – either in their own tokens – or major payment coins such as Bucketown, Ethernet and Latino, as part of each transaction automatically A simple algorithm can be credited in the accouts of investment. This definitely guarantees a profit paid to investors, but does not work in the best interests of all initial appeal.

Some early updates can well handle difficult coding surveillance, especially when they have a simple sample that does not require large ongoing developmental expenses. It is a good example of the king, it is building a wallet to catch all cryptocurrencies and pay freight based freight through this crisp purse. They are doing 10% of the toughest investment to pay the total income investors, and they have a tokenomax model that is easily accessible at 90% of the revenue. But the question is whether they can increase the next step faster by increasing an additional 10% increase in marketing efforts?

Traditional investment logic provides better return on investment in companies of this initial stage, particularly in the tech space, to maintain their income and instead of paying profits. This is always one of the main arguments against the flat tax structure, which reduces the success rate of initially-run tax companies.

Apart from this, estate tax is inaccessible because profit-sharing is subject to double tax: first at corporate level and second time at individual level. Perhaps there will be legislation someday in which a security token provides, thus preference tax is treated as the acquisition of stock, but to present the same similarities in the structure automatically It’s not enough because why to block pressure for companies?
Legal headaches

Due to Merry Lunch, companies have paid $ 50 million to start the initial public offering, as many refuses to deny that they are the gatekeepers. Well, at least not. Morgan Stanley is responsible for numerous movies and legal utilities that go to IPO, in which most companies do not perform as a company’s offer, if they sell stock and run its staff with potential legal liability. The company is about to protect.

However, in the “Wild West” of credit space, there is little concern over legal considerations. It is now shown by the number of issues related to SEC SC, which are now investigating maximum schedule promoters of the sale of baskets during the 2017 mutated golden relationship. Only 17 years have considered magic because they were handling a problem. There will be no equality, promoters and many advisors now call the token offering security, the magician thinks, there will be no obligation.

I hate being one of the bubble throwing, but it is far away from reality. I touched above the impact associated with difficult coding revenue, but the problem walks deeper than that, i.e., a mistake of answering questions: investors differ in the way that income is divided when it gets divided. ? Do the investors say to select members of board members? Of course, all these disciplines can be determined in a STO already and in strict code, it is only that people look hard and loose in this place, and I still do not find this company running a stroke. Finds their assets.

Other countries have more temporary view of the regulatory environment and the states can be a better fit. Seriously, in the Singapore Mining Authority Singapore, Damn Pong, head of Technology Infrastructure Office, Singapore, broke the two types of blachen companies.

The first type does not want to be regulated and the sandbox allows them to assign their status. Another business wants to make business legislation. Singapore’s mini authority has a manual shutdown policy:

“If any particular innovation is not needed, then we will allow innovation to prove their status.” Sanj said, then the ideas will be reduced and will continue: “The rules will always be lost.”

Of course, when the investment of advanced technology is very good, and whenever it gets worse, then investors “scam!” It has to be used and the laws of the file are included in order to strengthen the unfairly spread funds from their fingers. This is a thin line between creative bushes that is capable of dealing with pre-unwanted ways in the world, and artists have offered a unique success through the technology of non-availability.

Backup dependent

US companies who pay for non-foreigners to invest in investment or 30% of any payment have been received as backups related to the IRS, or to keep the proof of the tax Why do not you need a deal? This means that if you have a US based STO and buy any of your foreign investors, then you will need to handle it for it. Otherwise this company is on hook for 30%!

For example, your answer is not an American based STO and it is possible to join foreign country. However, American investors will likely face the tax reporting requirements of the beneficial property of the foreign corporation (Form 5471), or the ineligible foreign investor company’s rules. In any way it can get dirty for US owners, and penalties do not require at least $ 10,000 for collecting 5471 forms! Then I see the potential company liability if the investors do not need information and their needs are notified.

It is not impossible to collect all necessary information to manage it, it can be done by conversion to STO as part of your customer (QC) qualification, meaning that onboard user identifies when an identity Verification process has been taken. I do not have to find any platforms that are planning for these issues, and now it is not practically Tokyo exchange for how it will be practically solved.

Additionally, these reporting statements and other company related communication token holders have a high cost of rain. After running IPO companies, their stock-related annual costs and shareholders’ documents will have an average of $ 1 million and $ 1.9 million in the administration. While per person individual investor stock is not publicly publicly stocking, because towers are divided into smaller parts, the number of potential investors is relatively high. This can lead to a greater administrative burden for a small company that is not a staff or budget to manage it.

Security risks

Those people who listened to the benefits of most STOs are not developers. When seen from the development point of view, there is still not a very good way to meet the goals of the companies running state-owned companies. The Smart Contract Masonry Token holders’ ability to tighten coding; It was part of the original project of Ethiopia as it was discussed on independent independent organizations (DOOs) depending on the section in the White Paper.

Although the problem is that the tower-full smart deal with Ethiopia can implement many different types of functions and this elasticity increases the complexity that causes an additional risk of hackers. It was proved when the broken venture fund “DOO” was hacked, with $ 50 million stolen! It was still controversial that the timestamp was completed before the Ethernum hack to prevent permanent loss of funds.

There are several times when to maintain smart contracts when cutting corners to companies in the blockchain space. With the shortage of academic developers, this code is simply easy to copy the insect, and without the third-party process of auditing smart deal, most often only by hacked are discovered. However, after seeing the price tag, few companies have to go with the smart contract audits. But this is going to be a major threat, particularly after the Ulema-related pro-investigation investigation in Singapore was released on March last that 89 percent of samples were dangerous to attack!

Considering how the industry has resolved these security risks, and there is a dangerous search for the Foundation, which has stages in badge stages or companies, which have been using the utility toll, they will soon Will fall. Instead of working fast, faster. This is not the case, but when the first STO is hacked.

Investment Side

All these risks are for the company’s part. Only security risks, and possibly some tax issues, is really a potential loss for investors. In mind, I would say that benefits of liquidity are more than these risks in investors’ minds to resume the techniques on secondary exchange. This is especially true compared to the sales of crowdfunding equity, where a small part of the paper is concealed at five years old, you get everything in return for your hard work. He and the future have a promise of part.

So I’m growing rapidly on stats because I think they serve a very important place in the future of the investment world, I think there are still many issues that every company to issue security tanks Need to be addressed before switching. There are many consultant advisers in this industry who now listen to anyone. We work on solving problems through technology and regulations that facilitate reporting requirements for small companies, and focus on benefits STO can provide small investors and badge stage companies.

About Crystal Strangers

Criminal Stencer, EA, author of the Small Tax Guide, focuses on international tax, has been more than 15 years of tax experience. They are writing about 2014’s taxieconomic tax and regulatory problems. They want to help their tax clients who struggle with regulatory compliance, they set up the PCC, build a revolutionary new pay system using a blockchain accounting software company token PEA. This new, transparent society will promote fair wages and eliminate the need for the black market. You can follow its crisp adventures

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