[EN] Cube Chain, Howey Test Submission to SEC



Hello you all,

Cube Chain, Howey Test submission to SEC.


 What is Howey?


It refers to the criteria used by the US Supreme Court in the 1946 SEC and Howey suits. As an investment contract for general corporate procurement fund, it is the expectation of future profit according to the efforts of others. If it is judged as a security through Howey test, the US Securities and Exchange Commission will regulate it, and Cube Chain has submitted materials to pass the criteria.



The details about Howey test are followed as:




The United States Congress defined ‘securities’ in the Securities Act of 1933 and the Securities Exchange Act of 1934. The issuance and sale of all securities in the United States must be registered with the Securities Commission or be exempted from registration requirements. The ‘Howey Test’ is an effective means of determining whether a financial instrument is an ‘investment contract’ or a ‘security’.


Analysis of Cube Chain is based on each Howey element.


Analysis of the cube chain is based on each Howey element.

(1) Investing in funds: According to Howey and its Cases Act, funding investments may include capital, assets and cash, as well as goods, services or promissory notes. Since QUB buyers pay with passwords, there is no choice but to invest money in QUB transactions. Therefore, the first requirement of the ‘Howey Test’ is met.

 (2) Joint enterprise: Every court in the United States uses another test to analyze the existence of a joint enterprise. The three dominant approaches are as follows:

(i) Horizontal commonality (ii) narrow vertical commonality (iii) wide vertical commonality



In summary, the second requirement of the ‘Howey Test’ is not met by the broad vertical approach. This is because the success of the investor is not linked to the success of the promoter.



(3) Revenue expectation: Revenue does not mean that the investment contract is a ‘security’



(4) Only from the efforts of others: Expected revenues arise from the use of QUB rather than having simple QUB


Based on the above analysis, we believe that QUB used for platforms and services based on the Cube Chain White Paper will not be recognized as a “security” as judged by the SEC. The token is considered an ‘investment contract’ and all four requirements must be met in order to be protected by the securities and trade laws. Cube Chain will continue to work on the listing business through the advice of the law firm. The legal prospects have often been changed, updated, voted upon and tested by various competitive forces at this time, and Cube Chain has moved carefully and has been advised to keep an eye on the issues related to the blockchain and the cryptocurrency industry. Cube Chain has submitted its organizational structure design and operations to an overseas law firm.


Cube Chain White Paper revised by US attorney

Legal Opinion

No-Action request letter







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