PwC: Transition From ICOs to STOs is Underway

PwC: Transition From ICOs to STOs is Underway


PwC Switzerland, the leading audit and advisory company in Switzerland, has released the 4th edition of the ICO / STO Report.

Below we provide a summary of the report.

  • In 2018, the startups collected a staggering $19.69 billion from 1,132 ICOs and STOs. The month of June hit the record high of $5.85 billion, mainly due to EOS $4.1 billion ICO. The first fourteen biggest ICOs/STOs to this date were finalized by the end of the 1st half of 2018.
  • The second half of the previous year saw an improvement in the building of legal infrastructure, regulating the crypto sphere around the world. The report notes development from the US State Wyoming, where several bills related to the crypto industry have been passed. In addition to US, Bahrain’s central bank issued crypto assets rules, Thailand allowed issuance of tokenized securities, while Luxembourg legalized blockchain-powered transactions.
  • Security Token Offerings (STOs) are gaining in popularity as they prove to be more attractive for institutional investors. Unlike Initial Coin Offerings (ICOs), the STOs guarantee ownership, voting or dividend rights. So far, the biggest STO recorded is tZERO, which managed to attract $134 million of capital.
  • The rise in popularity of STOs coincided with the falling ICO market at the end of the first half of 2018. The second quarter of 2018 facilitated the collection of $71 million, compared to $232 million raised in the Q3 and $106 million in the last quarter.
  • Significant progress has been made in the building of legal infrastructure as certain countries e.g. Switzerland, US, Estonia, Germany and Liechtenstein made firm steps towards improving STO jurisdiction.
  • What may prove to be the dominant trend in 2019 is asset tokenization.
  • Regulated exchange platforms, flexible custody solutions, market data services, technical standards, and more reliable research in the areas of crypto and blockchain must be developed or improved in order for STOs to continue its growth.

PricewaterhouseCoopers (PwC) is one of the Big Four auditors and the world’s second largest provider of professional services behind Deloitte. The ICO/STO report was drafted in collaboration with Crypto Valley and CV Labs, the Swiss-based startup which offers a wide range of services from legal to tax and marketing.