Definition ∞ Investment tokens represent a digital asset designed to function similarly to traditional securities, offering holders potential financial returns or ownership rights in a project. These tokens typically derive their value from an underlying asset, profit share, or governance rights within a blockchain-based venture. Their classification as securities often subjects them to regulatory oversight from financial authorities.
Context ∞ News regarding investment tokens frequently centers on their regulatory classification and the various legal challenges faced by issuers. The distinction between utility tokens and investment tokens remains a key area of debate for regulators worldwide. Understanding these classifications is paramount for assessing legal compliance and investment risk in the digital asset market.
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