Is Your Crypto Bounty Token a Security? A Developer's Guide to the Howey Test

Howey decision The Howey decision was issued in 1946, sEC v. W.J. Howey Co. was decided by the U.S. Supreme Court in 1946.

Howey Test The Howey Test defines four prongs investment of money, common enterprise, expectation of profits, efforts of others.

Token purchase A purchase path meets the investment prong, sending crypto to receive tokens via a bonding curve satisfies Prong 1 for those tokens.

Fungible tokens commonly satisfy the common enterprise prong, holders' fortunes move together when the project is marketed.

Bonding curves create an expectation of profit for early buyers, the mechanism implies early buyers profit from later buyers.