Tokens that grant holders a share of the company’s future profits are classified as Security Tokens, as they meet the criteria of a security under most regulatory frameworks (e.g., the Howey Test in the U.S.). These tokens represent:

• Investment in a business venture: Buyers expect a return based on the issuer’s performance.
• Rights to profits or dividends: Similar to equity or debt securities in traditional markets.

Security Tokens are subject to regulations that apply to securities, such as disclosure requirements and investor protections.

A is incorrect: Utility tokens provide access to a product/service.
B is incorrect: Stablecoins maintain a stable value.
D is incorrect: Unbacked assets are not tied to company ownership.