What Are the Key Differences between an STO and an Initial Coin Offering (ICO)?

The primary difference lies in their regulatory status and underlying asset. An STO is a regulated securities offering where tokens represent ownership in an asset, like equity or debt.

In contrast, an ICO typically sells "utility" tokens, which grant access to a future product or service and often operate in a legal gray area. STOs are bound by securities laws, requiring investor verification (KYC) and offering greater investor protection.

ICOs have historically been less regulated, leading to higher risks for participants.