Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
SEC Confirms Meme Coins Are Not Securities Under U.S. Law

SEC Confirms Meme Coins Are Not Securities Under U.S. Law

CryptotimesCryptotimes2025/02/28 08:55
By:Ronak KumarDhara Chavda

SEC warns that fraud in the meme coin market can face legal action, as other authorities may crack down on scams and misleading promotions.

The U.S. Securities and Exchange Commission (SEC) declared meme coins do not fall under the category of securities according to federal laws. The SEC announced through its February 27 statement that meme coins function as collectibles rather than financial securities. 

Meme coins exist outside traditional securities regulations because they do not fit the definition of stocks or other securities. The SEC declared that meme coins lack the characteristics of securities because they fail to guarantee profits or income.

The SEC issued a warning about fraudulent activities involving meme coins but clarified that such activities could trigger action from other government authorities. The agency states that deceptive promotional activities and scams related to meme coins might trigger legal penalties. 

According to the SEC statement, “A meme coin does not constitute any of the common financial instruments specifically enumerated in the definition of “security” because, among other things, it does not generate a yield or convey rights to future income, profits, or assets of a business. In other words, a meme coin is not itself a security.”

The SEC does not regulate meme coins directly, yet federal and state agencies might intervene when they discover deceptive activities. The crypto community received the SEC’s clarification positively since experts predict it will motivate more investors to participate in the U.S. crypto market. 

The news of improved regulations led to minor stock price gains at Coinbase and Robinhood because it created conditions for meme coins to list without facing legal challenges.

The Modern Emoluments and Malfeasance Enforcement (MEME) Act proposed by House Democrats intends to stop public officials, including politicians, from making profit from meme coin endorsements and launches. 

The TRUMP coin experienced swift market fluctuations after its launch by President Trump while sparking worries about political interference in the meme coin sector.

Follow The Crypto Times on Google News to Stay Updated!
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

Genius Group Ordered to Sell Bitcoin Holdings

Genius Group must sell 10 BTC due to a court order, slashing its crypto treasury and market cap significantly.Unexpected Setback for Genius GroupMarket Cap Falls Below Bitcoin ReservesConcerns About Stability and Transparency

Coinomedia2025/04/04 14:11
Genius Group Ordered to Sell Bitcoin Holdings

Ethereum Price Sees 4 Straight Red Months

Ethereum has closed four red months in a row, but long-term holders remain hopeful for a rebound.Ethereum’s Tough Streak ContinuesHope on the Horizon for Ethereum Holders

Coinomedia2025/04/04 14:11
Ethereum Price Sees 4 Straight Red Months

Nexchain Emerges as April’s Best ICO: A New Era for Blockchain

Nexchain is committed to facilitating interoperability from one blockchain to the next through artificial intelligence, allowing for cross-chain communication and operational efficienciesConclusion

Coinomedia2025/04/04 14:11
Nexchain Emerges as April’s Best ICO: A New Era for Blockchain

Bitcoin Volatility Expected as U.S. Jobs Report Looms

U.S. jobs data and Powell’s speech today could trigger major Bitcoin volatility. Here’s what to watch.What to Expect from Today’s Market MovesWhy Bitcoin Traders Are Watching Closely

Coinomedia2025/04/04 14:11
Bitcoin Volatility Expected as U.S. Jobs Report Looms