Can a Governance Token Be Classified as a Security under the Howey Test?

Yes, a governance token can be classified as a security if it meets all four prongs of the Howey Test. While a token's initial purpose is to grant voting rights (utility), if investors purchase it primarily with the expectation of profit based on the active management or efforts of the core development team (the common enterprise), it may be deemed a security.

The degree of decentralization is key; a highly decentralized DAO where profit is derived from autonomous code is less likely to be a security than one with a centralized founding team.