On Thursday, the U.S. Securities and Exchange Commission (SEC) released new guidance asserting that most meme coins—cryptocurrency tokens inspired by memes—do not qualify as securities under federal law. Consequently, the SEC maintains that individuals who buy or hold these tokens do not benefit from the protections afforded by federal securities laws. The agency stated that participants involved in the offering and sale of meme coins are not required to register their transactions with the SEC.
This announcement follows the start of President Donald Trump’s second term, during which he ordered the establishment of the Department of Government Efficiency, led by Elon Musk. This agency has been linked to the meme coin Dogecoin. In a related move, President Trump introduced a meme coin named $TRUMP for his followers, which has experienced a dramatic loss in value, dropping by $12 billion since its inception on January 19, according to The Telegraph.
Mark Uyeda, who was appointed as SEC chairman by Trump, indicated a desire to clarify regulatory parameters around cryptocurrencies. On his first day, Uyeda initiated a cryptocurrency task force to address these issues. According to the SEC under Uyeda’s leadership, meme coins are categorized as collectibles rather than securities because they do not yield income or confer rights to future profits, assets, or business interests.
This stance sharply contrasts with the approach taken during the tenure of former SEC chairman Gary Gensler, who advocated for the classification of various cryptocurrencies, including meme coins, as securities. Gensler urged crypto businesses to register with the SEC proactively.
In addition to the meme coin guidance, the SEC announced the dismissal of its lawsuit against Coinbase, the largest cryptocurrency exchange in the U.S. Uyeda pointed out that for years, the SEC’s stance on cryptocurrency was primarily articulated through enforcement actions without public engagement. He emphasised the need for the commission to adjust its approach and formulate cryptocurrency policy in a more transparent manner.
In summary, the SEC’s latest guidance reflects a significant regulatory shift regarding meme coins, moving away from the previous stringent measures and signalling a more lenient view under the current administration.
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