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.
Context ∞ 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.

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→Regulatory Harmonization

→Digital Asset Regulation

→Digital Asset Classification

SEC and CFTC Align to Harmonize Digital Asset Regulation

Regulators initiate a joint framework to streamline digital asset classification and operational compliance, fostering market clarity.

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→Market Structure

→Crypto Compliance

→Coinbase Litigation

SEC Dismisses Coinbase Suit, Clarifies Meme Coin Status

The SEC's pivot from enforcement to clarity reshapes digital asset compliance, demanding revised risk assessments and operational frameworks.

→Decentralized Finance

→Regulatory Clarity

→DePIN

SEC Issues No-Action Letter for DoubleZero DePIN Token Classification

SEC guidance clarifies DePIN utility token status, establishing a critical precedent for compliant decentralized infrastructure development.

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→SEC No-Action Letter

→Compliance Framework

→Digital Asset Classification

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.

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→Financial Technology

→Regulatory Reform

→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 Offering

→Court Order

→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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→Exchange Act

→Digital Asset Classification

→Registration Requirements

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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→Securities Act Section 5

→Decentralized Infrastructure

→Legal Certainty

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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→Federal Oversight

→Investment Contract

→Howey Test

SEC Withdraws Coinbase Enforcement Action Signaling US Regulatory Policy Pivot

The SEC's dismissal of its major exchange lawsuit fundamentally alters the US compliance calculus, de-risking current platform operations and signaling a shift toward legislative clarity.

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→Securities Litigation

→Exchange Compliance

→Howey Test

SEC Concludes Ripple Lawsuit Solidifying Programmatic Sales Non-Security Status

The joint dismissal of all appeals codifies a critical judicial distinction, clarifying that programmatic exchange sales of digital assets do not constitute unregistered securities offerings.