The U.S. Securities and Exchange Commission (SEC) has officially announced that memecoins are not classified as securities. This decision has significant implications for investors and the market.
Memecoins and Securities Law
According to the SEC, memecoins do not meet the definition of securities under the Securities Act of 1933. These coins do not grant owners any rights to dividends, income, or corporate partnerships like stocks or investment contracts do. Therefore, the SEC deems it unnecessary to register the creators or investors of memecoins. However, investors are left without the traditional financial protections provided by the SEC. Experts advise caution, as they are vulnerable to fraudulent schemes such as pump-and-dump.
The MEME Act and Political Connections of Memecoins
Prior to this announcement, Democratic members of the U.S. House of Representatives introduced the Modern Emoluments and Malfeasance Enforcement (MEME) Act. This bill aims to restrict public officials from creating or endorsing memecoins, as Donald Trump did with the TRUMP coin. The bill has not yet been passed and remains open for discussion in Congress.
Reaction from the Crypto Community
The SEC’s decision has drawn various reactions from the cryptocurrency community. Some experts view this move positively, while others consider it insufficient. Cryptocurrency attorney Ishmael Green noted that the decision could encourage exchanges like Coinbase and Robinhood to list memecoins, potentially increasing memecoin trading on U.S. blockchains.
The SEC's decision on memecoins opens a new chapter in cryptocurrency history, but questions remain. The next steps of other governmental agencies are still unknown.
