The definition of Security Tokens.

Janak9955

Security tokens, more precisely, are a form of "beneficiary certificates with ownership" or "token certificates representing profit-sharing and voting rights." They are issued by the issuer based on the ownership of specific assets, issuing a certain quantity of tokens based on their estimated value.

The nature of the tokens is similar to beneficiary certificates of funds, profit-sharing rights in real estate income, or ownership of specific assets. Holders of security tokens are equivalent to the ownership of these assets and can enjoy rights such as profit-sharing and voting. Unlike most tokens issued in ICOs, which are purely functional tokens with only a purchase value for "future products or services developed by the project," security tokens have a nature similar to "vouchers" or "game points." Holders cannot legally manage the company itself, and ICO tokens themselves are just valueless points with no legal effect or recourse rights.

Security tokens must be established under regulatory premises. Before clear legal provisions are introduced, it is not possible to confirm what rights security tokens can actually confer on holders. However, what can be confirmed is that security tokens under regulatory frameworks can at least ensure that investors have reasonable ownership and supervisory rights over the token issuer.

Whether one can actually obtain profit-sharing rights in the assets depends on whether the law requires the token issuer to regularly disclose financial reports or specifies a certain proportional principle to compel profit-sharing. However, at least, it can prevent fraudulent events where ICO issuers disappear after the failure of the project.

Jafar224

This definition is worth taking a look at.

Isha000

This thing really needs to be defined.