Presumably, most tokens are securities since the majority of ICO participants view crowdsales as investment opportunities. However, if a token does not meet the three requirements of the Howey test, it may fall under the classification of a “utility token”. Utility tokens, which may also be called app coins or app tokens, provide users with access to a product or service.
For example, Filecoin–which raised an ICO-record $257 million–plans to provide a decentralized cloud storage service that will take advantage of unused computer hard drive space. ICO contributors received tokens that they will be able to use to purchase storage space from Filecoin once the service has launched.
Since total supply is fixed, utility tokens may appreciate over time if demand for the product or service increases. However, investors should be wary of startups that describe their token as a utility or app coin but also market it as an investment because it is likely that regulators will consider the asset a security.
It is important to note that “utility token” is an organizational distinction–not a legal one. The SEC has not given official guidance on utility tokens, so the industry does not with certainty whether they are subject to securities regulations.