Security Token
A blockchain token that represents ownership in a regulated financial asset — such as equity in a company, a debt instrument, real estate, or a fund — and is subject to securities laws in the issuing jurisdiction. Security tokens must comply with regulations like SEC's Regulation D or Regulation S, including investor accreditation, transfer restrictions, and reporting requirements.
“tZERO operates a regulated exchange for security tokens. A company might issue security tokens representing equity shares, where token transfers are restricted to verified, accredited investors via on-chain compliance controls.”
STO (Security Token Offering)
A regulated fundraising method where blockchain tokens represent ownership in an underlying asset — such as equity, debt, real estate, or revenue shares — and comply with securities laws. STOs offer more investor protection than ICOs through regulatory compliance, including investor accreditation requirements, prospectus filings, and transfer restrictions.
Compliance
The adherence to regulatory requirements governing cryptocurrency businesses, including Anti-Money Laundering (AML) rules, Know Your Customer (KYC) procedures, securities laws, tax reporting obligations, and sanctions screening. Regulatory frameworks vary significantly by jurisdiction and are rapidly evolving. DeFi's permissionless nature creates unique compliance challenges compared to traditional finance.
RWA (Real World Assets)
Physical or traditional financial assets — such as real estate, government bonds, commodities, private credit, and equities — that have been tokenized and brought on-chain as blockchain tokens. RWA tokenization aims to make traditionally illiquid or access-restricted assets tradeable, fractionally ownable, and composable with DeFi protocols. It is viewed as one of the largest growth opportunities for bridging traditional finance with blockchain.
Token
A digital asset created on an existing blockchain rather than its own native chain. Tokens can represent a wide range of assets and utilities — from currency and governance rights to real-world assets and collectibles. Unlike coins (BTC, ETH) which are native to their blockchain, tokens are created using smart contracts on platforms like Ethereum (ERC-20, ERC-721).