What Is the "Howey Test" and How Is It Applied to Cryptocurrencies? ▴ Learn

What Is the “Howey Test” and How Is It Applied to Cryptocurrencies?

The Howey Test is a US Supreme Court standard used to determine if a transaction qualifies as an "investment contract" and is thus subject to securities laws. It requires an investment of money, in a common enterprise, with an expectation of profit, derived solely from the efforts of others.

Regulators use this test to classify certain tokens, especially those from Initial Coin Offerings (ICOs), as securities.

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

How Does the ‘Howey Test’ Apply to Determining a Token’s Classification?

What Are the Key Elements of the Howey Test Used by the SEC?

Under What Criteria Does the SEC Classify a Crypto Asset as a “Security”?