TRON (trx) 
SEC Issues Statement on Memecoins and US Securities Laws
The Securities and Exchange Commission (SEC) has issued a statement on the classification of memecoins under US securities laws. According to the SEC’s Division of Corporation Finance, memecoins may not be subject to federal securities laws, as they do not meet the definition of a security under the Howey test.
Memecoins as Collectibles
The SEC views memecoins as more like collectibles than investments, with their value driven primarily by market demand and speculation. “Memecoins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, memecoins are akin to collectibles,” SEC officials wrote in a recent staff statement.
Key Characteristics of Memecoins
The SEC notes that memecoins do not have a central team pooling funds to develop a business, and buyers are not investing in a structured project expecting long-term growth. Instead, their price movements are driven by “market demand and speculation” rather than the “entrepreneurial or managerial efforts of others.” As a result, they fail to meet the Howey test’s criteria for an investment contract.
Implications for Memecoin Transactions
According to the SEC, persons who participate in the offer and sale of memecoins do not need to register their transactions with the Commission. However, the agency warns that scams involving memecoins could still face enforcement from other federal or state regulators.
Important Caveats
The SEC stresses that the statement only applies to memecoins that fit its description, and tokens disguised as memecoins to sidestep securities laws could still be subject to regulation. Additionally, the agency notes that its views are not a “rule, regulation, guidance, or statement” of the SEC itself, but rather a staff interpretation with “no legal force or effect.” The classification of memecoins could still depend on “the economic realities of the particular transaction.”
A Shift in SEC’s Stance
The SEC’s statement marks a significant shift from the regulator’s previous stance under former chair Gary Gensler, who mostly viewed all cryptocurrencies, except Bitcoin, as securities. The current SEC leadership, under the helm of a pro-crypto leadership, aims to provide “greater clarity on the application of the federal securities laws to crypto assets” with its statement.
For more news on cryptocurrency regulations and updates, follow Global Crypto News.
