How Does the ‘Howey Test’ Apply to DAO-issued Tokens?
The Howey Test is a US Supreme Court standard used to determine if a transaction qualifies as an "investment contract," and thus a security. It asks if there is an investment of money in a common enterprise with the expectation of profits to be derived from the efforts of others.
If a DAO's token meets these criteria, it is a security and subject to federal securities laws.
