Lately, there has been a lot of talk about Security Tokens, especially with Overstock’s tZero Security Token Exchange Platform garnering a lot of attention. Despite the word being tossed around the cryptoasset space so much, many still do not fully understand what it means to be a security token — and the implications this will have in the future. Any project that has raised money via an Initial Coin Offering (ICO) runs the risk of being classified as a security token and could be subjected to security regulations under the SEC.

First, we will distinguish between two common type of tokens: Utility Tokens and Security Tokens.

NOTE: This analysis does not include information about cryptocurrencies used as a store of value/medium of exchange or currency specific projects (Bitcoin, Bitcoin Cash, Decred, Monero, ZCash, etc.). Nor will we address stablecoins – coins collateralized to assets – such as Tether.