Security tokens vs exchange tokens — UK explained
Quick answer: Security tokens are digital representations of regulated investments (shares, debt). Exchange tokens like bitcoin are not regulated as investments — though tax and AML rules still apply. Check the FCA register for what you are buying.
Not all digital assets are treated the same. Security tokens represent regulated investments; most exchange tokens like bitcoin are unregulated for investment purposes.
Exchange tokens
Bitcoin, ethereum and similar — used as payment or investment but not issued by a central authority. FCA warns you can lose all your money.
Security tokens
Tokenised shares or bonds may fall under existing securities regulation. Platforms may need FCA authorisation.
Why the label matters
Scammers mislabel products to avoid rules. Check the FCA register and the firm's permissions before investing.
Frequently asked questions
Are all tokens on an exchange the same?+
No. Exchanges list many token types with different regulatory and tax treatment.