In another major statement for crypto Thursday, the SEC says that meme coins are generally not securities under federal law. The regulator’s Division of Corporation Finance put out a statement on Thursday revealing its current stance on meme coins, saying that “persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission under the Securities Act.”
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SEC says meme coins are generally not securities under federal law.
— Watcher.Guru (@WatcherGuru) February 27, 2025
“The offer and sale of meme coins does not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others,” the SEC says in a staff statement. First, meme coin purchasers are not making an investment in an enterprise. That is, their funds are not pooled together to be deployed by promoters or other third parties for developing the coin or a related enterprise. Second, any expectation of profits that meme coin purchasers have is not derived from the efforts of others. That is, the value of meme coins is derived from speculative trading and the collective sentiment of the market, like a collectible.”
“It is the Division’s view that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws…Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws,” the statement adds.
Also Read: SEC Drops Coinbase Lawsuit
The SEC has made several pro-crypto decisions in the last 24 hours, with its new leadership changing its tone on the crypto industry. Since Donald Trump’s US election win last November, the regulator has been transformed into one that approaches cryptocurrency differently. On Thursday, the SEC dismissed its lawsuit against Coinbase, as well as dropped its investigation into Consensys.
The statement is another big win for the crypto industry, as it lessesn the regulatory grip on the crypto industry as a whole. Not classifying meme coins as securities allows more freedom to buy and sell the assets.