What Is the Significance of the “Common Enterprise” Prong of the Howey Test?

The "common enterprise" prong requires that the fortunes of the investor be interwoven with those of the promoter or a third party, or with the fortunes of other investors. This typically means the success of the investment is tied to the collective success of the project.

In crypto, this often involves the funds being pooled and managed by a core team or foundation, suggesting a centralized effort.