According to Joshua Ashley Klayman, head of Morrison & Foerster’s Blockchain & Smart Contracts Group, there is no clear guidance under law of the difference between the terms utility token, app token, and security token, leaving a gray area for potential buyers and sellers.
“Most responsible securities lawyers would have said that The DAO token was highly likely to be a security,” she said in the Coindesk article “Utility Coins or Crypto Assets? Token Terminology Is One Big Gray Area.” “When people ask about app tokens, it's because they want to get out of the securities space. They don't want to be constrained by securities requirements.”
She continued: “If you think about it in terms of a video game arcade, at some arcades you can just put quarters in the machine. In others, you have to put tokens in the machine. So users have to buy the token to transact within the ecosystem. The idea is that people really want to use the product or service that the company is offering, and that the token is the only way to access it.”
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