U.S. District Judge No Trading Of CryptoKitties

The Howey test is a legal test used in the United States to determine whether a transaction constitutes an investment contract, which is a type of security subject to regulation under U.S. securities laws. The test is named after the 1946 U.S. Supreme Court case SEC v. W.J. Howey Co., which established the test's criteria.

Under the Howey test, a transaction is considered an investment contract if it meets the following criteria:

1. It involves an investment of money or other valuable consideration.
2. There is an expectation of profits from the investment.
3. The investment of money is in a common enterprise.
4. Any profits are derived from the efforts of a promoter or third party.

In the context of NFTs, if the NFT transaction meets these four criteria, it may be considered an investment contract and subject to U.S. securities laws. The judge's review of the Howey test suggests that the court is examining whether the NFTs in question meet these criteria and should be subject to such regulation.