What Is the ‘Common Enterprise’ Prong of the Howey Test?

The 'common enterprise' prong of the Howey Test requires that the investment is pooled with others and that the success of the investment is tied to the success of the overall venture. This can be either horizontal (investors' fortunes are pooled together) or vertical (investors' fortunes are tied to the promoter's efforts).

In crypto, this is usually met if the token sale proceeds are pooled to fund the project's development.