RWA Utility Tokens, Stop Kidding Yourselves
The article, written by lawyer Shao Jiadian, critically examines the common claim by RWA (Real World Asset) token projects that their tokens are "utility tokens" rather than securities. The author argues that regulatory bodies globally do not classify assets based on their self-proclaimed labels but on their actual economic function and structure.
The core argument is that most so-called "utility RWA tokens" involve users investing money into a common asset pool managed by the project, with the expectation of profits derived from the project's efforts (e.g., dividends, revenue sharing from assets like real estate or equipment). This structure meets the criteria of an "investment contract" and is therefore treated as a security in major jurisdictions like the U.S., EU, Switzerland, and Hong Kong.
Two key legal cases are cited as evidence:
1. **DeFiMoney Market (DMM):** Its fixed-yield token and "governance" token were both deemed securities by the SEC because investors' profits came from a managed asset pool.
2. **Unicoin (2025):** An asset-backed token promising returns from real estate and equity was charged by the SEC as an unregistered securities offering and fraud.
The author highlights an inherent conflict: utility tokens emphasize *use* and *consumption*, while RWA tokens are fundamentally linked to *assets* and *returns*. Any token offering profit-sharing, dividends, or redeemable cash flows will be viewed as a security by regulators.
The conclusion is stark: projects are not avoiding securities laws out of ignorance but to circumvent the stricter requirements of a regulated securities offering. The only viable paths to avoid securities classification are:
1. Purely functional tokens with no profit expectation.
2. Private offerings strictly for accredited investors.
3. Operating under specific regimes like Dubai's VARA that regulate security-like tokens as virtual assets.
Ultimately, any RWA token offered to the public that is tradable and promises returns will almost certainly be treated as a security. The choice for projects is not between utility and security labels, but between "long-term compliance" and "short-term gambling."
marsbit49 min fa
