A security, in a general sense (but not according to the legal definition), is described as a financial instrument secured by a certain type of valuable asset. Securities can also be backed by revenues or profits in a company. Historically, a security is issued and purchased by signing the transaction documents on paper, such as share-purchase agreements or subscription agreements. The offer and sale of any security by any issuer in the US is subject to the federal and state securities laws and regulations.
A security token (a token classified as a security) performs a similar function as a traditional security, except that it confirms ownership through blockchain transactions rather than paper documents. Security tokens provide some key financial rights to the investors that include shares of revenue, shares of profit, equity, dividends, rights to vote, and some...
