Is “The Howey Test” Outdated? Modernizing Guidelines For The Digital Age

The rate and reach of cryptocurrency adoption in recent years alerts the dire need for up-to-the-minute guidelines that simultaneously safeguards traders and enables innovation to flourish. Because it stands, most crypto tokens descend interior a regulatory gray divulge as they don’t match interior the confines of the extinct monetary machine — so why must always aloof they descend prey to inapplicable, outdated ideas?

Currently, the SEC applies “The Howey Test,” a moral prognosis basically basically based on a 1946 U.S. Supreme Court ruling, to distinguish between securities and non-securities. The SEC asserts that securities are an “investment of money in a in model project with an cheap expectation of profits to be derived from the efforts of others.”