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The US Securities and Exchange Commission (SEC) said that meme coins like Dogecoin and Shiba Inu are not securities, marking a landmark regulatory shift for the crypto industry.
The agency’s decision, outlined in a Feb. 27 statement, says meme coins are “akin to collectibles” rather than financial instruments subject to securities laws.
“A meme coin is not itself a security,” the regulator said in a statement. ”Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles. Meme coins also typically have limited or no use or functionality.”
The SEC’s guidance highlights a broader shift in US crypto regulation under the pro-crypto Trump administration, marking a departure from the regulation-by-enforcement approach of former chair Gary Gensler.
“This is HUGE,” said The Kobeissi Letter, which has more than 756k followers on X. ”The statement clarifies TONS of unknowns behind the legal implications of launching a memecoin.”
WOW.
The SEC just said that meme coins are generally NOT considered securities under US federal law.
They also said that meme coins have “limited or no use” and do not need to be registered with the SEC.
This is a MASSIVE statement by the SEC. pic.twitter.com/7KpB2c2481
— The Kobeissi Letter (@KobeissiLetter) February 27, 2025
The SEC added that investors who buy and trade meme coins will not be protected by US securities laws, but said that any fraudulent offers and meme coin sales may still “be subject to enforcement action or prosecution by other federal or state agencies.”
But by clarifying that meme coins are not securities, the agency is easing legal uncertainty for traders and developers, potentially fueling further innovation in the space.
“Everything is falling into place for a massive bull cycle,” said Batman, with 83k followers on X. “Market is bad right now, but in the long term this is very good.”
On the flip side, the lack of regulatory oversight from the SEC makes it crystal clear that investors must navigate the meme coin market without consumer protections, at least for now.
New Meme Coin Bill Emerges In The US
While the SEC declares that meme coins are not securities, House Democrats have been pushing for the Modern Emoluments and Malfeasance Enforcement (MEME) Act.
Today, I introduced the MEME Act, which prohibits top federal officials from issuing, sponsoring, or promoting a security, commodity, or digital asset with criminal and civil penalties. pic.twitter.com/NbjmcwoEB5
— Rep. Sam Liccardo (@RepLiccardo) February 27, 2025
Spearheaded by California Representative Sam Liccardo, the bill aims to restrict public officials from launching or endorsing their own meme coins.
This follows the controversial launch of the Official Trump (TRUMP) token that surged on launch before undergoing a sharp price drop.
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