What It Means for Crypto

SEC’s pro-crypto governance starts taking action on crypto, but this time, it’s for GOOD. The US SEC has made it clear that meme coins, like TRUMP and other popular tokens, are not considered securities or investments that need to follow strict financial rules. Instead, the agency sees them more like collectibles—something people buy for fun rather than as a real financial asset. However, just because meme coins aren’t regulated like stocks doesn’t mean scammers can get away with fraud. The SEC warned that if someone uses meme coins to mislead people or run scams, they could still face legal trouble.

Meme Coins: Not Securities, Says SEC

According to the SEC’s latest statement, meme coins do not meet the legal definition of securities under the Securities Act of 1933. Unlike stocks or investment contracts, Meme coins don’t give holders any rights to future profits, income, or ownership in a company. Because of this, the SEC doesn’t require meme coin creators or traders to register with them, meaning they don’t have to follow the same rules as traditional investments. However, this also means investors won’t get the usual protections from the SEC, exposing them to the risk of fraud, pump-dump schemes, and misleading advertising.

Legal experts, including Bain Capital Crypto’s Khurram Dara, highlighted that even though the SEC won’t directly regulate meme coins, other federal or state agencies could take action against deceptive practices to protect investors.

A New Bill Emerges

Before the SEC’s statement, House Democrats had already been pushing the Modern Emoluments and Malfeasance Enforcement (MEME) Act, aimed at restricting public officials from launching or endorsing meme coins. The bill, spearheaded by California Representative Sam Liccardo, came in response to Donald Trump’s controversial “TRUMP” meme coin, which saw a dramatic rise and fall in value. Lawmakers fear that such tokens could be exploited for personal or political gain, raising ethical concerns.

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The SEC’s stance has sparked mixed reactions in the crypto space. Some industry players see it as a positive move, arguing that regulatory clarity will encourage more investment in meme coins, particularly on US-based blockchains like Solana. Crypto lawyer Ishmael Green noted that with meme coins officially outside securities laws, exchanges like Coinbase and Robinhood may feel more confident listing them, which could lead to a surge in market activity. Following the announcement, shares of major crypto exchanges saw a slight uptick, reflecting optimism within the industry.

Meanwhile, in a surprising turn, the SEC is dropping its lawsuits against Coinbase, Consensys, and Gemini, signaling a positive change for crypto assets. 

With the MEME Act on the horizon and the SEC shifting gears, the regulations scene for crypto—especially meme coins—is changing fast. Whether these changes bring more clarity or confusion remains to be seen.