Why Are STOs Considered Less Risky for Investors than ICOs?

STOs are considered less risky because they are structured as regulated securities offerings. This means issuers must comply with securities laws, which often includes providing detailed disclosures about the business, its financials, and the risks involved.

Investors in STOs have legal rights to the underlying asset, such as equity or a share of profits. ICOs, on the other hand, have often been unregulated, providing utility tokens with no ownership rights and little to no transparency, making them more susceptible to fraud and failure.