How Does the ‘Expectation of Profit’ Element of the Howey Test Apply to Utility Tokens?

For a token to be classified as a utility token, the issuer must demonstrate that the token is primarily purchased for its functional use, not for financial gain. The 'expectation of profit' is triggered by marketing materials that promise investment returns or price appreciation.

Even if the token has utility, if the primary motivation for purchase is speculative profit, it satisfies this prong of the test. Issuers must focus on utility, not investment potential, in all communications.