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Security token
A security token is a sort of digital asset that denotes ownership or participation in a physical, tradeable financial asset. Security tokens are intended to conform with securities laws and provide investors with certain rights and protections, as opposed to utility tokens, which have a defined function inside a blockchain ecosystem.
In order to ensure regulatory compliance and stop illegal activity, security token offers (STOs) often involve extensive Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.