The SEC has issued a statement clarifying that most meme coins, such as Dogecoin and Shiba Inu, do not fall under the definition of securities, leaving them without federal protections for investors.
SEC's Statement on Meme Coins
On February 27, 2025, the SEC announced that most meme coins are not securities, meaning there is no federal oversight and protection for buyers. This statement has sparked disagreement within the commission.
Commissioner Caroline Crenshaw's Criticism
Commissioner Crenshaw criticized the SEC staff's conclusions, arguing that such moves 'wrongly advance a categorical exclusion for meme coins despite the presence of managerial effort and expectation of profit.' This leaves market uncertainty and may decrease institutional interest.
Impact on Meme Coin Buyers
The SEC's decision impacts meme coin buyers, leaving them without federal protections. While retail traders continue to drive market activity, institutional involvement may decrease. Crenshaw's dissent highlights regulatory divides.
The SEC's exclusion of meme coins from securities regulations may alter trading dynamics and increase risks for buyers as protective mechanisms are absent.
