What is the Context of Howey Test?

The application of the Howey Test to various digital assets remains a primary point of contention in cryptocurrency regulation, particularly within the United States. Regulators often use it to classify tokens as securities, impacting their issuance and trading requirements. Legal challenges continue to seek clearer interpretations for different token structures and their decentralized governance models.

Howey Test

Definition

The Howey Test is a legal standard originating from a US Supreme Court case, used to determine if a transaction constitutes an investment contract and thus a security subject to federal regulation. It assesses whether there is an investment of money in a common enterprise with an expectation of profits derived solely from the efforts of others. This test is frequently applied to digital assets.

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∞Regulatory Precedent

∞No-Action Letter

∞Utility Token

SEC Staff Grants Registration Relief for Decentralized Infrastructure Network Token

The SEC Staff's no-action relief provides a critical utility token blueprint, clarifying the non-security status for functional DePIN network assets.

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∞Compliance Framework

∞Regulatory Precedent

∞Securities Act

SEC Staff Grants No-Action Relief for Decentralized Physical Infrastructure Token

The Division of Corporation Finance's no-action relief establishes a critical precedent for utility-focused token programmatic transfers under the Howey Test.

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∞Institutional Sales

∞Securities Offering

∞Howey Test

Federal Judge Rejects SEC and Ripple Settlement Terms

Court rejection of the joint settlement motion forces Ripple to choose between appealing the institutional sales ruling or accepting the original injunction.

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∞Risk Mitigation

∞Compliance Checklist

∞Systemic Risk

SEC Chairman Signals Major Policy Shift to Clear Digital Asset Rules

The SEC's commitment to "clear rules" and classifying "most" assets as non-securities fundamentally de-risks operational strategy for issuers and platforms.

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∞Securities Law

∞Decentralized Physical Infrastructure

∞SEC No-Action Letter

SEC Staff Grants No-Action Relief for Programmatic DePIN Token Transfers

This landmark SEC staff clarity de-risks programmatic utility token distributions by confirming that 'work-to-earn' models may fall outside Howey's scope.