Definition ∞ Digital token status refers to the legal and regulatory classification of a digital asset, determining how it is treated under existing laws. This classification dictates whether a token is considered a security, commodity, currency, or other asset type. Its status impacts regulatory oversight, tax obligations, and trading restrictions.
Context ∞ The digital token status is a constant point of discussion and contention for regulators globally, particularly concerning initial coin offerings and new token launches. Jurisdictions are actively working to establish clear guidelines, with significant implications for how digital assets are issued, traded, and utilized. Legal clarity on this status is critical for market certainty and broader institutional adoption.
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