The Securities and Exchange Commission (SEC) has clarified its stance on meme coins, stating that most of these digital assets do not qualify as securities under U.S. federal law.
The guidance, issued on Thursday by the SEC’s Division of Corporation Finance, explains that meme coins generally lack functionality or practical use and are more comparable to collectibles.
According to the SEC, transactions involving meme coins do not constitute the offer or sale of securities. Consequently, individuals engaging in meme coin transactions are not required to register them with the Commission.
However, the agency also noted that meme coin investors are not afforded the protections provided by federal securities laws.
“Meme coins do not fit the definition of ‘security’ as they do not yield returns or grant rights to future profits, income, or business assets,” the SEC statement said.
Trump’s Second Term Brings Regulatory Shifts
The guidance arrives during President Donald Trump’s second term, a period marked by regulatory shifts.
One of Trump’s executive orders established the Department of Government Efficiency, an independent advisory body led by entrepreneur Elon Musk. The department, which takes its name from Dogecoin, a well-known meme coin, aims to streamline government operations.
While some digital tokens have gained widespread popularity and speculative interest, their classification remains a subject of debate within financial and regulatory circles.
Meanwhile, legislative efforts related to cryptocurrency regulation continue. House Democrats are preparing to introduce a bill that would prevent elected officials and their families from financially benefiting from personal meme coin investments.
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