> For the complete documentation index, see [llms.txt](https://paydax.gitbook.io/paydax-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://paydax.gitbook.io/paydax-docs/paydax-whitepaper-v6/part-1-sec-howey-test-compliance-achieving-utility-status.md).

# ✅ PART 1: SEC Howey Test Compliance – Achieving "Utility" Status

The Howey Test is used to determine if a crypto token is a security. A token is likely a security if it involves:

1. An investment of money
2. In a common enterprise
3. With the expectation of profits
4. Solely from the efforts of others