Implications of the SEC’s Stance that Meme Coins are not Securities

In this statement, the SEC staff took the position that typical meme coins — a category of crypto assets inspired by internet memes, pop culture, or trending jokes — do not constitute “securities” under federal law.

In the view of the Division, transactions in these meme coins need not be registered under the Securities Act of 1933, nor exempt from registration because they do not involve an “offer and sale” of securities.

This effectively signals a hands-off regulatory approach for genuine meme coins, while cautioning that investors in such tokens will not be protected by federal securities laws if the tokens fail or lose value.

The staff’s stance aligns with recent remarks by Commissioner Hester Peirce — who noted that many meme coins are likely not securities — and reflects the SEC’s effort to clarify how traditional securities law definitions apply in the rapidly evolving crypto market.

The Staff Statement defines a “meme coin” as a type of crypto asset driven largely by social media buzz and community speculation rather than any inherent utility or investment promise. These tokens are typically marketed for entertainment or cultural purposes, often explicitly disclaiming any expectation of profit or practical use beyond novelty or community engagement. Their market value tends to be highly volatile and based purely on demand and viral sentiment — characteristics the SEC staff likened to collectibles (e.g., digital art or trading cards) rather than investment instruments.

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