Security tokens and Utility tokens explained.

Introduction:

• In this post I explain what a security token is, and what a utility token is, and how they differ. I also provide ten references, so you can read more.

Security Token & ICO

• A security token is a digital asset that is subject to federal securities regulations.
• It is typically issued through an Security Token Offering (STO) and represents an investment in a company or asset.
• Security tokens are designed to provide investors with a share of the profits, revenue, or appreciation of the underlying asset.

Utility Token

• A utility token is a digital asset that is used to access a product or service.
• It is not subject to federal securities regulations and is typically issued through an Initial Coin Offering (ICO).
• Utility tokens are designed to provide users with access to a specific product or service, and may also be used to pay for goods and services within a specific platform.
• Unlike security tokens, utility tokens do not represent an investment in a company or asset.

Examples
This has been described as a Utility token, BNB token and Matic are also described as Utility tokens. An asset backed token, which is backed by real estate, art or another asset is an example of a security token.

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That’s it. @shortsegments

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References:

1. https://www.investopedia.com/terms/s/security-token.asp
2. https://www.investopedia.com/terms/u/utility-token.asp
3. https://www.investinblockchain.com/security-token-vs-utility-token/
4. https://www.coindesk.com/security-token-vs-utility-token-whats-difference
5. https://www.investopedia.com/ask/answers/041715/what-difference-between-security-token-and-utility-token.asp
6. https://www.investopedia.com/terms/i/initial-coin-offering-ico.asp
7. https://www.investopedia.com/terms/s/securities-regulation.asp
8. https://www.investopedia.com/terms/p/profit-sharing.asp
9. https://www.investopedia.com/terms/a/appreciation.asp
10. https://www.investopedia.com/terms/g