How Do Regulatory Frameworks in Different Jurisdictions Affect the Choice between an ICO and an STO?

Jurisdictional differences create "regulatory arbitrage." Projects may choose an ICO in jurisdictions with permissive or unclear crypto laws to avoid stringent security regulations. Conversely, projects seeking institutional investment will choose an STO in jurisdictions with clear, established frameworks, like the US or Switzerland, to ensure legal certainty.

The framework dictates the required compliance, costs, and target investor base.