The Securities and Exchange Commission clarified on Thursday that memecoins do not fall under the purview of federal securities laws, although fraudulent activities involving memecoins could still be subject to legal consequences.
What happened: The SEC’s Division of Corporation Finance stated in a press release that cryptocurrencies inspired by internet memes, characters, and current trends and having limited or no functionality are not securities.
This also meant that parties involved in meme coin transactions won’t be protected by federal securities laws.
“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 …
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