How Does the Distinction Affect the Listing of the Token on Centralized Crypto Exchanges?

Centralized exchanges are hesitant to list tokens that could be classified as unregistered securities due to the high regulatory risk. They generally prefer utility tokens or tokens that have achieved sufficient decentralization.

Security tokens must be listed on specialized, regulated security token exchanges. The utility/security distinction therefore determines the available market access, significantly impacting liquidity and trading volume.