Key Points:
- The SEC stated that meme coins are not considered securities but classified as collectibles, though fraudulent activities could still face enforcement actions.
- The SEC is reassessing its crypto oversight, with some enforcement potentially shifting to other agencies.
The U.S. Securities and Exchange Commission (SEC) announced Thursday that meme coins, a category of cryptocurrency tokens often tied to internet trends or public figures, do not fall under federal securities laws.
While meme coins may not be classified as securities under federal law, the SEC’s stance does not exempt them from regulatory scrutiny.
SEC Classifies Meme Coins as Collectibles, Not Securities
In a statement issued on February 27, the SEC’s Division of Corporation Finance clarified that meme coins “do not involve the offer and sale of securities under the federal securities laws” and are “akin to collectibles.”
The agency emphasized that these digital assets are typically acquired for entertainment, social engagement, and speculation, with their value largely dictated by market demand rather than intrinsic financial utility.
“A meme coin does not constitute any of the common financial instruments specifically enumerated in the definition of “security” because, among other things, it does not generate a yield or convey rights to future income, profits, or assets of a business,” said the agency.
Despite the lack of direct SEC oversight, the agency cautioned that deceptive practices tied to meme coins could be subject to enforcement actions from other federal or state regulators. The agency also noted these token susceptibility to rapid price swings and the potential for misleading promotional efforts.
Regulatory Scrutiny on Crypto Increases as Lawmakers Push for New Restrictions
The SEC’s stance comes amid renewed interest in meme coins, fueled in part by political figures. President Donald Trump and First Lady Melania Trump launched their own digital tokens just before Trump’s return to the White House in January.
However, both tokens have since suffered significant losses, with Trump’s “Official Trump” (TRUMP) plummeting nearly 85% from its peak and Melania’s “Melania Meme” (MELANIA) dropping 99%, according to CoinMarketCap.
The broader meme coin market has also been marred by high-profile collapses. Recently, LIBRA, a cryptocurrency promoted by Argentine President Javier Milei, surged to a $4.4 billion market cap before crashing, sparking controversy within the crypto community.
The SEC’s declaration coincides with a legislative push by House Democrats to introduce a bill that would ban public officials, including presidents, from issuing, endorsing, or sponsoring digital assets. Meanwhile, the Trump administration has pledged to provide clearer regulatory guidance for the cryptocurrency industry, signaling potential policy shifts in the near future.
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