U.S. courts are utilizing the Howey Test to determine whether crypto tokens qualify as securities, according to a report by Kelman Law. The Howey Test, which includes four elements—investment of money, common enterprise, expectation of profits, and reliance on others' efforts—is being adapted by courts and the SEC to fit the unique nature of token ecosystems. The classification of a token as a security is influenced by the context of its sale and marketing rather than its technical design. The SEC maintains that tokenized assets are considered securities unless the transaction structure is altered. Courts have also ruled that tokens are not inherently securities, underscoring the importance of understanding the Howey framework for compliance and risk management in the evolving legal landscape of crypto regulation.