Can a Governance Token Also Be Classified as a Utility Token?

Yes, a token can function as both a governance token and a utility token. Many tokens are designed to provide access to a service (utility) while also granting the holder the right to vote on the protocol's future (governance).

For instance, a token might be used to pay transaction fees (utility) and also allow voting on the fee structure (governance). The regulatory challenge arises when the primary value proposition is the expectation of profit from the governance/management team's efforts, which could push it toward a security classification despite the presence of utility.