When a token starts looking like an investment contract
A recurring theme across many jurisdictions' securities laws is that they don't primarily care what a financial instrument is called, they care about its economic substance: is a person handing over money with an expectation of profit, based substantially on the efforts of others? Tests built around that basic question predate crypto by decades and were developed for far more traditional investment schemes, but regulators in multiple countries have applied similar substance-over-form thinking to tokens. A token marketed with promises of price appreciation driven by a core team's ongoing work, sold to fund that team's development efforts, can look a lot like an investment contract under that kind of analysis, regardless of whether it's technically built on a blockchain or called a 'utility token.'
This doesn't mean every token is a security, tokens that function more like access keys to a working product, or that are distributed without an investment-like pitch, sit in meaningfully different territory. But it does mean builders can't assume that using the word 'utility' or pointing to blockchain technology changes the underlying legal analysis. The safer mental model is to ask what the token actually does and how it's actually marketed, since that substance, not the label chosen for it, tends to be what regulators and courts focus on.