Global Token Classification and Regulatory Analysis

The Howey Test remains the core filter used by the SEC. A token is treated as a security if purchasers contribute value, expect profits, rely on identifiable managerial efforts and interact with a structure that resembles a coordinated investment scheme. We review token mechanics, marketing, governance, tokenomics, treasury activity, staking flows and any reward logic that resembles profit-sharing.

This determines whether the token falls inside U.S. securities law, which exemption can be used (Reg D or Reg S), how distribution must be controlled and what exchanges accept as compliant.

The UK uses a functional approach: regulated tokens include security tokens and e-money tokens. Everything else sits in the FCA’s “unregulated cryptoasset” classification but can still trigger other rules such as financial-promotion restrictions, AML obligations and exchange-specific onboarding tests.

We analyse voting rights, redemption logic, stabilisation mechanisms, embedded profit claims, governance powers and any cash-equivalent features to determine where the token fits. The classification drives UK listing readiness, custodian acceptance and investor onboarding.

In Singapore, MAS classifies tokens as either Digital Payment Tokens (DPTs) or Capital Markets Products (CMPs). DPTs cover most non-security crypto assets and impose licensing or registration duties for exchanges, brokers and custodians. CMPs include anything that functions like a security, share, debt instrument or derivatives contract.

We map the token’s rights, intended use, economics, redemption features, governance mechanics and distribution path against both statutes. This classification determines whether the token can be listed or offered in Singapore without a licence, or whether it triggers CMP obligations and requires a licensed intermediary.

Under EU Regulation 2023/1114, all tokens fall into utility tokens, asset-referenced tokens or electronic-money tokens. Each category has defined issuer obligations, disclosure standards, whitepaper requirements and custodial expectations.

We classify the token under MiCA and analyse whether the project is an issuer, a CASP, or both. This classification is essential for EU exchange listings, treasury operations and cross-border offering plans.

Swiss FINMA applies a three-category model that defines payment tokens, utility tokens and asset tokens, with an additional focus on custody risk, transfer restrictions and profit-linked features. Tokens with equity-like mechanics or asset backing often fall into FINMA’s asset-token category, which exchanges treat as higher-risk.

Liechtenstein’s TVTG (Blockchain Act) focuses on the rights embedded in the token and the function of the token issuer. It pays attention to representation of value, redemption claims and the relationship between the token and an underlying legal position. Exchanges use this to screen for tokens that may unintentionally represent a claim or contractual entitlement.

Hong Kong’s SFC regime for Virtual Asset Trading Platforms applies a securities-style analysis to tokens that grant profit rights, control, redemption or asset exposure. Even offshore DEX aggregators now treat SFC guidance as a risk benchmark because it directly affects liquidity in the Asian markets.

Dubai’s VARA framework and the UAE Central Bank’s interpretations look at custody arrangements, transfer functions, settlement logic, staking rewards and whether the project operates a “VA Activity” such as issuance, advisory, or exchange services. CEX platforms servicing MENA regions apply these standards to avoid being caught inside the VARA perimeter.

Australia’s Corporations Act and ASIC’s crypto guidance examine whether a token functions like a managed-investment-scheme interest, a share, a derivative or a financial product. Any pooling of assets, profit-sharing or centralised managerial effort can place the token inside the financial-product regime, which exchanges treat as a hard compliance blocker.