The SEC declared meme coins, tokens like Dogecoin and Shiba Inu—do not qualify as securities under U.S. law. This ruling, amid Trump’s White House return, frees investors from registering meme coin trades under the Securities Act of 1933.
The SEC’s Division of Corporate Finance explained, “Memecoins serve entertainment and cultural purposes, driven by hype, not profit promises or functionality.” Unlike stocks or bonds, they lack yield or business ties and resemble collectibles. Still, the agency warned creators against promoting scams or mislabeling to evade laws.
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, 2025Memecoin Market Risks
Memecoins, boasting a $48.13 billion market cap per Forbes, thrive on speculation. Dubai’s VARA flagged their volatility, noting risks like rug pulls and manipulation. SEC Commissioner Hester Peirce urged Congress and the CFTC to address this “memecoin menace.”
Read: Pi Coin Skyrockets 293%, Outpacing Major Cryptocurrencies
"Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws."
The statement clarifies TONS of unknowns behind the legal implications of launching a memecoin.
This is HUGE.
Follow us @KobeissiLetter for real time analysis as this… pic.twitter.com/e7pHZPtvrl
— The Kobeissi Letter (@KobeissiLetter) February 27, 2025Elon Musk champions Dogecoin, while Trump and others launch branded tokens. Yet, global regulators caution against hype-driven memecoins, urging investors to avoid potential losses.
