26% Of STOs in Europe Failed or Were Canceled

Security token offerings are still a very niche market. While there is merit to this model compared to ICOs,  investors have cooled off on blindly investing in tokens and assets. In Europe, things are not looking all that bad, despite some initial growing pains along the way. A healthy increase in successful tokenized projects shows this market may undergo some prominent changes over the coming years. 

26% of STO do not Succeed

Reports like these will always make people what the negative statistics are. According to Fintelum, 26% of security token offerings in Europe have failed or were canceled so far. This can be due to a wide variety of reasons. Either the team didn’t raise enough capital, changed its mind, struggled to find a token sale partner or hundreds of other potential issues. With 9% of the STOs hitting a roadblock early on, it is evident this industry won’t necessarily be as successful as initial coin offerings have been in the past few years. 

One also has to keep in mind that Europe is not the most prominent region for cryptocurrencies and tokens. Although some regions are an exception, this part of the world is well behind the rest. That is not necessarily a bad thing, yet STO projects have to keep in mind this is something which can prove to be a hurdle. Considering how there are still plenty of projects ongoing and upcoming, the failure rate may continue to increase as more time progresses.  The 9% failure rate is worrisome, but the 17% STO cancellation rate is not all that great either. 

17% of Projects Conclude Successfully

It is still very early to draw any real conclusions, but it seems roughly one in five STOs will succeed in Europe. The report shows 17% of security token offerings successfully concluded their token sale at this time. To put this in more normal numbers, 6 projects have been successful in terms of raising their minimum target out of the 35 announced STO projects in Europe to date.  This further confirms STOs are not as common as initial coin offerings were several years ago. That is primarily because of very strict regulations.

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With 34% of STOs still ongoing at the time of publication, it will be interesting to see how many will succeed. If half of them raise their minimum target, one could officially call it a success. That still means Europe isn’t necessarily waiting for security token offerings at this stage. A very interesting trend to keep an eye on. Given how overly successful ICOs were in 2017, it is good to see STOs struggle a bit. One can only hope investors have smartened up before throwing money at literally every offering on the market. 

Switzerland Leads the Charge

In Europe, several regions seem more open-minded toward cryptocurrencies than others. Switzerland has become a prominent place in this regard. It has its own crypto region in Zug, which shows there is a bright future ahead for the various cryptocurrencies on the market today. It comes as no surprise this country leads the charge in terms of STOs. Nearly one in three successful and ongoing security token offerings are based in this country alone. 

The second region on the list is – to much surprise – the United Kingdom. Nearly one in four STOs originate from that part of Europe. Once the Brexit finalizes, it will be interesting to see how that situation evolves. Germany and Liechtenstein are also prominent regions for STOs at this time. Finland, Lithuania, and The Netherlands are also trying to step up their presence in this industry at this time. 

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.

JP Buntinx

JP Buntinx is a FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he aims to achieve the same level of respect in the FinTech sector.

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