On 25 July 2017, the Securities and Exchange Commission (SEC) issued an

investigative report, henceforth called the DA Report, which examined whether

tokens offered and sold by a virtual" organization known as "The DAO" were securities

and therefore subject to federal securities laws. The official name of the report was

" Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of

1934: The DAO".

a. In its report, the SEC referenced the Supreme Court ruling SEC v. W.J. Howey

Co., 328 U.S. 293, 301 (1946), which is nowadays referred to as the "Howey

Test". List the criteria of the Howey Test that determine whether an investment

contract exist and whether a token issue should be treated as a securities

offering.

b. Describe what the SEC concluded in its DAO Report and explain how it affected

future initial coin offerings?