ETHOS is not a security, or Tokenized Security, because it does not meet the legal definition of a security applicable in the United States, Canada, Singapore, United Kingdom, or any other OECD jurisdiction. In the United States, this is more commonly referred to the "Howey Test"



What is a "Howey Test"?


The “Howey Test” is a test created by the Supreme Court for determining whether certain transactions qualify as “investment contracts.” If so, then under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements. A security is found to exist when all 4 of these elements exist, 1) investment of money 2) in a common enterprise 3) with an expectation of profits 4) from the efforts of others. Although our Token Sale involved an investment of money, none of the three remaining elements were applicable.