The Securities and Exchange Commission issued guidance on Thursday saying it does not view most meme coins, which are crypto tokens that originated from memes, as securities under United States federal law.
As a result, the SEC says it does not believe people who purchase or hold meme coins are protected by federal securities law and that people “who participate in the offer and sale of meme coins do not need to register their transactions with the Commission.”
The SEC’s new guidance comes roughly a month into U.S. president Donald Trump’s second term, in which Trump issued an executive order to create the Department of Government Efficiency, led by Elon Musk, an independent government advisory agency that’s named after the meme coin Dogecoin.
President Trump also launched a meme coin for his supporters, called $TRUMP, just days before his inauguration. Since its peak on January 19, the coin has lost $12 billion in value, The Telegraph reported on Thursday.
Mark Uyeda, the SEC chairman appointed by Trump in January, previously signaled he would create clear regulatory lines around cryptocurrencies. On Uyeda’s first day in office, he announced the formation of a cryptocurrency task force.
Uyeda’s SEC argues that meme coins are not securities in its view, because they do “not generate a yield or convey rights to future income, profits, or assets of a business.” Rather, the Commission says it views meme coins more like collectibles.
Thursday’s guidance on meme coins represents a stark contract compared to how the SEC considered meme coins under its former chairman, Gary Gensler. Gensler repeatedly called for crypto tokens, including meme coins, to be treated as securities, and told crypto service providers to proactively register with the SEC.
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Also on Thursday, the SEC announced it dismissed its lawsuit against Coinbase, the United States’ largest cryptocurrency exchange.
“For the last several years, the Commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public,” said Uyeda in a statement. “It’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner.”
