Memecoins more like collectibles than securities, SEC staff says
SPECULATIVE cryptocurrency assets known as memecoins are not considered securities, the staff of the US Securities and Exchange Commission (SEC) said on Thursday (Feb 27), even though the assets generate buzz.
This means people who offer and sell these digital assets do not need to register with the SEC, according to the statement. It also means buyers are not protected by federal securities laws.
Memecoins are a type of crypto asset that are seeded by an Internet meme or a joke. They are inspired by memes, characters, current events or trends, but carry no fundamental value. Owners buy them for entertainment and speculation.
“In this regard, meme coins are akin to collectibles,” the SEC staff said, adding the assets typically have “limited or no use or functionality”.
“Given the speculative nature of meme coins, they tend to experience significant market price volatility, and often are accompanied by statements regarding their risks and lack of utility, other than for entertainment or other non-functional purposes,” according to the statement.
While SEC staff statements are not official rules or regulations, the market largely abides by them.
Memecoins made headlines days before US President Donald Trump took office, when he launched a memecoin of himself with his fist in the air – a reference to a photo taken following an attempt on his life during his campaign that was widely circulated online. The value of the token has since plummeted.
Earlier this month, Argentine President Javier Milei touted a crypto token on social media, which he said was supposed to help Argentine businesses. The move ensnared him in a political scandal. BLOOMBERG
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