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Blockchain

IPO & M&A Blocked, STO Blockchain Could Be a Breakthrough

2 mins mins
IPO & M&A Blocked, STO Blockchain Could Be a Breakthrough

Key Points:

  • SEC regulations hinder small companies’ IPOs, while the FTC’s tough stance on large-scale M&A limits startup exit options, risking capital flow and competitiveness in the tech ecosystem.
  • Thanks to pro-crypto government policies, STO blockchain offers a cost-effective fundraising solution, enabling startups to access capital without depending on big tech giants.

Balaji Srinivasan, former CTO of Coinbase, believes that Security Token Offerings (STOs) on the blockchain may become a vital financing alternative for technology companies. As traditional funding paths like Initial Public Offerings (IPOs) and mergers and acquisitions (M&A) face significant hurdles, STO blockchain models could offer a new window of opportunity.

Traditional IPOs and M&A Face Significant Regulatory Barriers

Balaji pointed out that SEC regulations have made it increasingly difficult for small companies to go public. Additionally, the U.S. Federal Trade Commission’s (FTC) recent tough stance on large-scale mergers and acquisitions further limits startup exit strategies. According to Balaji, this challenging policy environment could weaken capital flow and diminish the competitiveness of the entrepreneurial ecosystem.

Read more: Crypto Hacks 2024 Hacken Report Overview

STO Blockchain Emerges as an Attractive Alternative

Balaji emphasized that policy shifts in the crypto space are creating favourable conditions for STOs. The new government’s pro-crypto stance has significantly boosted the appeal of blockchain-based financing. STOs offer several advantages, including lower listing costs for small businesses and a source of capital independent of big tech firms.

He also highlighted that the STO blockchain model aligns with the government’s goal of promoting independent small businesses. Moreover, it provides global investors an opportunity to invest without exerting direct control over the company. This structure could democratize access to startup investments and foster a more dynamic entrepreneurial ecosystem.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Avatar of Yuna Kim

Yuna Kim

19 February 2025, 08:55:28 GMT +0000

With a deep passion for unraveling the complexities of finance and crypto, I have dedicated over 5 years to financial journalism, covering everything from traditional equities to the forefront of venture capital. I believe that crypto is a fascinating puzzle, and I thrive on helping people make sense of it.

As a journalist at Coincu, my mission is to deliver clear, insightful, and well-researched content that empowers readers to navigate the ever-evolving financial landscape with confidence.

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