The matter of the difference between tokenization (STO) and ICO takes us back to 2017.
ICO (Initial Coin Offering) is the type of token issuance related to crypto and utility tokens rather than actual stocks. Utility tokens act as vouchers inside a single ecosystem. For example, to use the New York underground metro station, you must buy a ticket that will be invalid in London, so utility tokens are native tokens inside one system.
Tokenization STO (Security Token Offering) is a legal and compliant way of attracting capital via security tokens backed by real assets and running under securities laws. It's a process of transferring a company's stock onto the blockchain, which preserves its regulation canvas.