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Home » Does Crypto Pass the Howey Test? – Investopedia

Does Crypto Pass the Howey Test? – Investopedia

Does Crypto Pass the Howey Test? – Investopedia

The Howey test derives its name from a landmark U.S. Supreme Court case in 1946, SEC v. W.J. Howey Co., that established a blueprint for whether a transaction qualifies as an investment contract. If a trade meets the test, it is a security and falls under the same laws and regulations as stocks. Deals that meet the Howey test are thus subject to disclosure requirements, registration, and other investor protections. Key Takeaways The Howey test is a legal framework provided by the U.S. Supreme Court to determine whether a transaction qualifies as an investment contract and is thus subject to securities… 

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