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Howey Test
A legal test, from U.S. case law, used to determine whether something qualifies as an investment contract.
The Howey Test is a legal test originating from U.S. case law, used to determine whether a transaction qualifies as an "investment contract" (and therefore a security), generally examining whether it involves an investment of money in a common enterprise with an expectation of profit from others' efforts.
It's commonly referenced in discussions of whether a specific crypto token might be classified as a security in the United States, though it is one specific jurisdiction's legal framework, not a universal global standard.
Examples
- U.S. regulatory discussions of a token's status often reference the Howey Test's specific criteria.
- The Howey Test is a U.S.-specific legal framework, not a globally uniform standard.