A memecoin inspired by Elon Musk's dog, Floki (FLOKI), has been recognized by the U.S. Commodity Futures Trading Commission (CFTC) as an example of a utility token.
The token was noted during the Global Markets Advisory Committee (GMAC) meeting on Nov. 21, where the focus was on providing clarity for digital asset markets.
Floki's mention places it alongside the second largest cryptocurrency by market capitalization Ethereum and Avalanche as part of a broader effort by the CFTC to define how certain digital assets should be classified.
Floki, is up 411% year-to-date, outperforming Dogecoin and Shiba Inu that were up 264% and 118%.
The committee spotlighted Floki for its expanding ecosystem, particularly Valhalla, the project's blockchain-based metaverse game. Set to launch in 2025, Valhalla uses FLOKI as its primary currency, allowing players to earn and spend the token within the game -- an important factor in its classification as a utility token.
GMAC, created by CFTC in 1998, advises on U.S. market competitiveness and regulatory challenges.
The Digital Asset Markets Subcommittee, part of the GMAC, is working to bring more transparency to crypto regulation, particularly around whether tokens are classified as commodities (regulated by the CFTC) or securities (overseen by the SEC).
The subcommittee includes industry leaders such as Brooke Ybarra, Senior Vice President of Innovation and Strategy at the American Bankers Association; Caroline Butler, CEO of Digital Assets at BNY Mellon; Giovanni Vicosio, Global Head of Cryptocurrency at CME Group; Jason Urban, Global Head of Trading at Galaxy Digital; Marvin Ammori, Chief Legal Officer at Uniswap Labs; and Robbie Mitchnick, Head of Digital Assets at BlackRock, among others
Tokens that provide immediate, practical use -- like Floki's role in Valhalla -- are being acknowledged as non-security commodities. The subcommittee outlined that utility tokens must offer "immediate, non-incidental consumptive use" to qualify.
Floki's ecosystem has grown rapidly over the past year. In addition to Valhalla, the team has rolled out FlokiFi, a DeFi platform offering asset locking services. Floki's developers have also launched Floki University, an educational initiative focused on improving blockchain literacy.
"This acknowledgement is significant, considering Floki's focus on fundamentals and our painstaking efforts to develop disruptive products aimed at accelerating the crypto revolution," the FLOKI team said in a statement. "It shows that regulators are starting to see the real-world value behind our project, and it paves the way for greater institutional trust and adoption."
The GMAC meeting also discussed the importance of self-certification for utility tokens. A proposed process would allow utility projects to certify themselves, with the CFTC given 10 business days to respond or request further review.