Which of the following is a security token?

• A. Exchange tokens
• B. Utility tokens
• C. Security tokens
• D. None of these

Answer: (C)

Security tokens are tokens that represent ownership in an asset or in a project and are regulated as securities. They embody an investment claim, with investors expecting returns based on the issuer’s performance or the value of underlying assets. This regulatory status and investment expectation distinguishes them from other token types. Exchange tokens typically serve a platform’s needs, such as paying fees or facilitating access within an exchange, and do not inherently represent asset-backed ownership. Utility tokens grant access to a product or service and aren’t designed as investments. Therefore, the token type that fits the description of a security token is the correct choice.