Meme Coins Do Not Qualify as Securities: SEC Confirms

The US Securities and Exchange Commission’s (SEC) Division of Corporation Finance released a statement clarifying its views on the application of federal securities laws to meme coins.

In a statement this week, the division stated that it does not view meme coins as securities but more like collectibles.

Meme Coins Are Not Securities

According to the SEC’s latest guidance, transactions involving meme coins do not constitute the offer and sale of securities under the Securities Act of 1933. As a result, those offering or selling meme coins are not required to register their transactions with the SEC or seek exemptions from registration. This means that federal securities law protections do not apply to meme coin purchasers or holders.

The division’s position is based on the definition of securities under federal law, which includes financial instruments like stocks, bonds, and investment contracts. It said that meme coins do not fit these categories, as they do not yield profits, convey income rights, or involve “pooled investments” managed by third parties.

The statement also highlighted that meme coin purchases are speculative, with value driven by market demand rather than managerial efforts by promoters. However, the SEC clarified that fraudulent activities related to meme coins could still face enforcement actions under other federal or state laws.

This guidance, however, does not apply to products misrepresented as meme coins to circumvent securities regulations. Each case will be evaluated based on the specific economic realities of the transaction, as per the division.

SEC’s Revised Approach

The SEC’s updated guidance on meme coins comes about a month into President Donald Trump’s second term. Just before his inauguration, Trump introduced a meme coin named Official Trump (TRUMP) for his supporters, while his wife, Melania Trump, launched a separate token called Official Melania (MELANIA).

The new SEC chairman, Mark Uyeda, appointed by Trump in January, had previously indicated plans to clarify cryptocurrency regulations. On his first day in office, Uyeda announced the creation of a cryptocurrency task force.

The SEC now states that meme coins do not qualify as securities in a notable shift from the agency’s approach under former chairman Gary Gensler, who pushed for crypto tokens to be categorized as securities and urged crypto service providers to register with it.

Earlier this month, SEC Commissioner Hester Peirce had said that many of the meme coins in the market do not come under the regulatory scope of the regulatory agency while asserting that “facts and circumstances matter.”