The question of whether a token is a security determines which rules apply to it. The tests used are generally older than blockchains and examine the arrangement rather than the technology.
The analysis looks at the transaction
Long-established tests ask whether money was invested in a common enterprise with an expectation of profit derived from the efforts of others.
Each element concerns how something was offered and what the buyer was led to expect, not the format in which the asset was recorded.
A token can therefore be sold in a way that constitutes a securities offering while the same token trades differently later.
Marketing is treated as evidence
Statements about a team's roadmap, planned development and anticipated appreciation support the conclusion that buyers were relying on others' efforts.
Because those statements are usually public and permanent, they form a straightforward record for anyone examining the offering afterwards.
This is why the language used in fundraising materials receives close attention, often more than the technical documentation does.
Decentralisation is a factual question
Where a network operates without any identifiable group whose efforts determine its success, the reliance element becomes harder to establish.
Assessing that involves looking at who controls development, who holds supply, and whether the network would continue if the founding team stopped.
None of these are binary, and there is no threshold at which a project becomes decentralised as a matter of law.
Jurisdictions have taken different routes
Some apply existing securities law through enforcement and case-by-case analysis, while others have written bespoke frameworks that classify tokens into defined categories.
The same token can therefore be treated differently depending on where it is offered, and a classification in one place carries no weight in another.
Approaches also change as legislation is passed and cases are decided, so descriptions of the position date quickly.
Classification changes the obligations
Where securities treatment applies, requirements around registration, disclosure, marketing and who may trade the asset follow, along with restrictions on the venues that may list it.
Exchanges therefore make their own assessments before listing, and delistings sometimes reflect that analysis rather than anything about the project.
Anyone whose position depends on how a particular token is classified needs advice for their own jurisdiction, since the answer is specific and subject to change.