How Do Utility Tokens Differ from Security Tokens in the Context of Regulatory Compliance? ▴ Learn

How Do Utility Tokens Differ from Security Tokens in the Context of Regulatory Compliance?

Utility tokens are intended to provide access to a product or service within a decentralized network and are generally not classified as securities, often falling outside strict financial regulation. Security tokens, conversely, represent an investment contract, equity, or debt, and are subject to the same stringent securities laws as traditional financial derivatives.

Compliance for security tokens is much more complex, requiring KYC/AML procedures and accredited investor verification.

What Is the Difference between a Utility Token and a Security Token in Cryptocurrency?

What Is the Primary Difference between a Utility Token and a Security Token?

How Does the Concept of a “Security Token” Differ from a Utility Token in Terms of Regulation?

What Is the Primary Distinction between a Utility Token and a Security Token?