What are the Howey test and its implications for cryptocurrency?

Article

Name

What are the Howey test and its implications for cryptocurrency?

Types

Publish date

03

Month

/

18

Day

/

2023

Year

12

:

00

am

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The implications of the Howey test for cryptocurrency are significant, as the test provides a framework for determining whether a particular cryptocurrency offering should be classified as a security under U.S. law. If a cryptocurrency offering meets the criteria outlined in the Howey test, it may be considered a security and subject to federal securities laws.

The Howey test is a legal test used in the United States to determine whether a transaction qualifies as an investment contract and, thus, is considered a security under federal law. The test was established by the U.S. Supreme Court in SEC v. W.J. Howey Co. (1946), and it has since been applied in numerous cases to determine whether various financial arrangements and offerings constitute securities.

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https://cointelegraph.com/news/what-are-the-howey-test-and-its-implications-for-cryptocurrency

Referenced by

If asset meets Howey test criteria, SEC has to determine if an asset is an investment contract

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Objective of a Howey test is to provide a framework for an asset to be qualified as a security

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If, by following the guidance of Howey test, SEC qualifies an asset to be a security, it has to comply with the requirements of securities laws

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