• The United States Securities and Exchange Commission (SEC) has weighed in on memecoins.
• The SEC does not view them as securities under federal law.
• It explained that memecoins do not, “ generate a yield or convey rights to future income, profits, or assets of a business.”

If you own a memecoin Stateside, you may be interested to hear what the Securities and Exchange Commission (SEC) has said on the subject. According to the regulator, memecoins are not securities in its view, and as such are not protected by federal law.

Memecoins have been an increasing area of interest in US politics, with current President Donald Trump even launching one of his own that has struggled to maintain any kind of momentum following his inauguration more than a month ago.

Trump’s closest advisor at the moment, Elon Musk, has also been a strong advocate for cryptocurrencies, and is also a massive fan of one memecoin in particular – dogecoin – which is believed to be the inspiration behind the name of the Department of Government Efficiency (DOGE).

As these specific types of cryptocurrency are closely tied to memes, and not backed by more traditional financial means like Bitcoin and Ethereum, the SEC does not hold them to the same standard.

“Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles, it shared in an official statement.

“It is the Division’s view that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws. As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission under the Securities Act of 1933 (‘Securities Act) or fall within one of the Securities Act’s exemptions from registration,” it added.

While memecoins are not protected as the SEC has outlined, the regulation is taking a more proactive involvement with cryptocurrencies, which up until now have remain relatively unregulated in the US. To that end, Mark Uyeda, the new SEC chairman appointed by President Trump last month, noted how the regulator’s approach will cage moving forward.

“For the last several years, the Commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public. It’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner,” Uyeda said in a statement per TechCrunch.

This may open the door to a more official crypto being developed by the Trump administration, but as it currently stands, it likely won’t be a memecoin.

“Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws,” the SEC confirmed.

[Image – Photo by Kanchanara on Unsplash]