# kaal:claim:4021599-027

**Claim.** The Howey test operates as the practical sorting device between the two categories: a token that passes the Howey test is deemed a security token, while a token that does not qualify under Howey is often classified as a utility token.

**Type.** mechanism  **Support.** argued

**Holds when.**

- United States federal securities law

**Source quote.**

> Utility tokens can also be distinguished from securities tokens through the Howey test. While a token that passes the Howey test is deemed a security token, a token that does not qualify under the Howey test is often classified as a utility token.45 The SEC provides

**From.** Wulf A. Kaal, *Securities Versus Utility Tokens* (2022), IV. Distinction between Utility Token and Securities Token, page 14

**Cite as.** Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599

**Verify.** sha256 of source PDF `bb03790af46b3710e306121cfae25f850e3e7477e0f95313af42b9feeb6bc0c4` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202022%20-%20Securities%20Versus%20Utility%20Tokens.pdf

**Topics.** securities-law, systemic-risk, tokenomics

**Keywords.** howey-test, token-classification, securities-token, utility-token

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