Utility Token
A token meant to provide access or function within a product — and the label projects use to argue they're not securities.
A utility token is designed to be used within a platform — paying for services, accessing features, participating in governance — rather than held purely as an investment. Projects emphasize the “utility” framing partly because a genuine utility token has a stronger argument for not being a security under the Howey Test.
The distinction is often blurry in practice: many “utility” tokens are bought overwhelmingly as speculative investments, and regulators look at economic reality over labels. A token sold with promises of price appreciation driven by the team’s efforts can be deemed a security regardless of claimed utility. The utility-versus-security question shapes token design, marketing language, and legal exposure across the entire industry — and rarely has a clean answer.