How Does the Term ‘Decentralization’ Factor into Regulatory Scrutiny?

Decentralization is a key factor in regulatory scrutiny, particularly under the US Howey Test. A truly decentralized network, where no single entity controls the project, is less likely to be classified as a security because there is no 'common enterprise' or 'expectation of profit derived solely from the efforts of others.' Regulators focus on the degree of control by the founding team.