SEC has described utility tokens as the services or units of services that can be purchased. Utility tokens that a startup would issue to finance future customer's purchase should not be securities, since their purpose is to facilitate the purchase.
See this link for further information.
https://medium.com/startup-grind/understanding-the-difference-between-coins-utility-tokens-and-tokenized-securities-a6522655fb91
See this link for further information.
https://medium.com/startup-grind/understanding-the-difference-between-coins-utility-tokens-and-tokenized-securities-a6522655fb91
Thanks for the link. But I'm not sure whether this article necessarily addresses the latest developments in this space e.g Munchee.
Munchee claimed that it was a "utility token" and SEC shut them down.
Here's the article
Munchee said that it would use the offering proceeds to run its business, including hiring people to develop its product, promoting the Munchee App, and ensuring ‘the smooth operation of the MUN token ecosystem.
Hence they went on to conclude that Munchee was actually releasing a security masquerading as a utility. Seems like SEC doesn't like the idea that the token sale proceeds will be used to fund the project.
