# Securities token `kaal:entity:securities-token` **Status.** derived This node is assembled mechanically from the 14 claims that carry the concept tag `securities-token`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 14 claims across 1 works, 2022 to 2022. **2022** - [4021599-006](https://wulfkaal.github.io/claims/4021599-006) [failure/argued] *(failure mode)* -- The lack of a clearly delineated nomenclature for the term securities token has produced divergent uses and interpretations of that term, especially in relation to the term utility token. > The lack of a clearly delineated nomenclature for the term "securities token" resulted in various uses and interpretations of the term securities token, especially vis-à-vis the term "utility token." Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-007](https://wulfkaal.github.io/claims/4021599-007) [definitional/argued] -- Securities tokens are typically investment contracts while utility tokens typically provide their users with access to a product or service, even though the lines between the different token types are blurred regularly. > appreciation, dividends or revenue share.8 While the lines between the different types of tokens are blurred regularly,9 securities token are typically investment contracts, whereas utility tokens typically provide their users with access to a product or service. Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-008](https://wulfkaal.github.io/claims/4021599-008) [failure/asserted] *(failure mode)* -- The boundaries between the different types of tokens are regularly blurred, so the securities token versus utility token distinction functions as a typical case distinction rather than a clean partition. > While the lines between the different types of tokens are blurred regularly,9 securities token are typically investment contracts, Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-009](https://wulfkaal.github.io/claims/4021599-009) [definitional/asserted] -- Securities tokens involve an underlying interest or function of the token to replace actual financial securities such as shares or equity in legacy businesses. > In other words, securities tokens involve an underlying interest or function of the token to replace actual financial securities, such as shares or equity in legacy businesses.11 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-010](https://wulfkaal.github.io/claims/4021599-010) [condition/argued] -- A key commonality that permits delineating securities tokens from other token designs is that securities tokens derive their value from an external tradeable asset. > Key commonalities of securities tokens characteristics enable the delineation of securities tokens from other token designs. A key commonality of securities tokens includes its ability to derive their value from an external tradeable asset.12 The underlying assets for Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-011](https://wulfkaal.github.io/claims/4021599-011) [definitional/argued] -- The underlying assets of securities tokens, such as corporations, earning streams, or entitlements to interest payments or dividends, are identical to the underlying assets of equities, bonds, and derivatives. > These underlying assets of securities tokens are identical to the underlying assets of equities, bonds, and derivatives. In other words, securities tokens Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-012](https://wulfkaal.github.io/claims/4021599-012) [definitional/evidenced] -- The literature on securities tokens converges on two commonalities: that a securities token functions as or is synonymous with traditional security assets, and that securities tokens are subject to traditional securities regulation. > that a securities token functions as or is synonymous with traditional security assets,15 and 2. that securities tokens are subject to traditional securities regulation.16 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-018](https://wulfkaal.github.io/claims/4021599-018) [design/argued] -- Rather than replacing legacy financial services as securities tokens do, utility tokens are designed to give users future access to a product or service that may or may not exist at the time of the utility token issuance. > Rather than replacing legacy financial services like securities tokens, utility tokens are designed to provide users with future access to a product or service that may or may not exist at the time of the utility token issuance.29 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-023](https://wulfkaal.github.io/claims/4021599-023) [definitional/argued] -- Utility tokens can be distinguished from securities tokens along several core factors: the purpose of the token, associated valuation, associated rights, user expectations, and regulatory status. > Utility tokens can be distinguished from securities tokens based on several core factors, including but not limited to the following: the purpose of the token, associated valuation, associated rights, user expectations, and regulatory status.38 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-024](https://wulfkaal.github.io/claims/4021599-024) [mechanism/argued] -- A utility token's value depends on its functions and therefore correlates with actual demand for the token, so a scaled up project with a high number of users usually yields increased utility token value, whereas a securities token's value correlates with the value of the issuing company. > That is, a scaled-up project with a high number of users usually result in increased utility token value. By contrast, the value of securities tokens is often correlated to the value of the token issuing company.40 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-025](https://wulfkaal.github.io/claims/4021599-025) [definitional/argued] -- Securities token users typically expect the value of the issuing company to be directly tied to token value, while utility token users typically expect no relation between the issuer's current valuation and the value of the utility token. > Users of securities tokens typically expect that the value of the issuing company is directly tied to the value of the securities token. By contrast, users of utility tokens typically expect no relation between the current valuation of the issuing company and the value of the utility token.42 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-026](https://wulfkaal.github.io/claims/4021599-026) [failure/asserted] *(failure mode)* -- The regulatory status of securities tokens is rather well established, whereas the regulatory status of utility tokens remains unclear. > The regulatory status for a securities tokens is rather well established. By contrast, the regulatory status for utility tokens is unclear.44 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-027](https://wulfkaal.github.io/claims/4021599-027) [mechanism/argued] -- 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. > 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 Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 - [4021599-028](https://wulfkaal.github.io/claims/4021599-028) [predictive/asserted] -- The term securities token is fairly well defined as of 2022, and additional regulatory guidance will continue to delineate its central features and distinguishing characteristics. > The term securities token is fairly well defined in 2022 and any additional regulatory guidance will continue to delineate its central features and distinguishing characteristics. Wulf A. Kaal, Securities Versus Utility Tokens (2022). SSRN: https://ssrn.com/abstract=4021599 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/securities-token.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.