📚 #Glossary

🔍 Howey Test:

The Howey Test is a legal standard used in the US to determine if a transaction qualifies as an investment contract and thus is considered a security under federal law. The test was named after the 1946 case in the SEC vs. WJ Howey company.

This test involves four criteria, all of which must be met for the SEC to classify the transaction as a security:

1⃣ an investment of funds,

2⃣ in a common enterprise,

3⃣ with an expectation of profits,

4⃣ from the efforts of others.

#HoweyTest #SEC #InvestmentContract #CryptoRegulation