Howey’s Still Here: A Recent Reminder on the Limits of the SEC’s Crypto Thaw

Executive Summary

What is new: The Ninth Circuit’s recent decision in SEC v. Barry underscores that, despite a regulatory thaw, the Howey test remains the law for determining whether particular digital assets and tokenization projects are subject to the securities laws.

Why it matters: Sponsors of projects seeking to tokenize real-world assets or fractionalize interests must still assess whether ongoing efforts by managers could trigger securities classification.

What to do next: It will be important when structuring tokenization projects to carefully evaluate whether the manager’s ongoing efforts and expertise steer the project toward profitability in a way that may trigger the Howey test.

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The U.S. regulatory environment for digital assets has never been more prom