What is the difference between a utility token and a security token?

@kimberly 

A utility token and a security token are two types of cryptographic tokens that are issued during an Initial Coin Offering (ICO) or token sale.

1. Utility Token: A utility token is designed to provide access to a product or service offered by the company that issues it. It grants holders certain rights or privileges within the platform ecosystem and can be used to pay for goods or services within that platform. The value of a utility token is directly linked to the usefulness and demand for the platform it is associated with. Utility tokens do not necessarily represent ownership in the company and are not regulated as securities. Their primary purpose is to facilitate the functioning of the platform.
2. Security Token: A security token represents ownership in an asset, typically a company or an investment contract. It derives its value from the underlying asset or an external source of value. Security tokens are subject to regulatory oversight as securities, meaning they must comply with securities regulations and registration requirements. They typically entitle holders to certain financial rights, such as dividends, profit sharing, equity ownership, and voting rights. Security tokens are often used to represent real-world assets like shares in a company or fractional ownership of a property.

In summary, the main differences between utility tokens and security tokens lie in their purpose, regulations, and underlying value. Utility tokens focus on utility and access rights within a platform, while security tokens represent ownership in an asset and comply with securities regulations.