Can a Reverse ICO Token Be Classified as a Security, and What Test Determines This?

Yes, a reverse ICO token can be classified as a security if it meets the criteria of the Howey Test, a US Supreme Court precedent. This test determines if an investment contract exists, which is a key component of a security.

If the token is purchased with an expectation of profit, derived from the efforts of others (the company), it is likely a security. Issuers must carefully structure the token's utility to avoid this classification.