# Security tokens vs exchange tokens — UK explained

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.

## Key facts
- Security tokens = regulated investments.
- Exchange tokens = high-risk, mostly unregulated.
- NFTs are usually separate category.
- Promotions rules differ.
- Tax treatment follows asset type.

## 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.

## FAQs
### Are all tokens on an exchange the same?

No. Exchanges list many token types with different regulatory and tax treatment.

## Sources

- [HMRC — CRYPTO10100 token types](https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto10100)
- [FCA — Cryptoassets](https://www.fca.org.uk/consumers/cryptoassets)

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— Digital Assets UK (https://digital-assets.co.uk/regulation/security-tokens-vs-crypto/), reviewed 2026-06-23. Source: https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto10100