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Differentiate between Horizontal and Vertical Commonality in the Howey Test

Horizontal: investor fortunes tied to each other; Vertical: investor fortune tied solely to the promoter's efforts.
Greeks.Live16.11.25

Differentiate between Horizontal and Vertical Commonality in the Howey Test.

Horizontal commonality requires a pooling of investor funds where the fortunes of all investors are tied to the success or failure of the overall enterprise. Vertical commonality links the investor's fortune solely to the promoter's efforts.

Most ICOs satisfy horizontal commonality, as all token purchasers are investing in the same project's success.

What Is the “Common Enterprise” Prong of the Howey Test?
Define the “Solely from the Efforts of Others” Prong of the Howey Test
What Is the Meaning of ‘Common Enterprise’ in the Context of the Howey Test?
How Does the Token Price Appreciation Relate to Common Enterprise?

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