SEC Staff Statement on Meme Coins

On February 27, 2025, as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets, the SEC's Division of Corporation Finance (the Division) provided its views on "meme coins." They defined a "meme coin" as a type of crypto asset inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community to purchase the meme coin and engage in its trading.

The Division states that meme coins typically are purchased for entertainment, social interaction, and cultural purposes, have a value driven primarily by market demand and speculation, are akin to collectibles, typically have limited or no use or functionality, and tend to experience significant market price volatility given their speculative nature. The Division states that meme coins often are accompanied by statements regarding their risks and lack of utility, other than for entertainment or other non-functional purposes.

It is the Division's view that transactions in the types of meme coins described in this statement do not involve the offer and sale of securities under the federal securities laws. As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission under the Securities Act of 1933 ("Securities Act") or fall within one of the Securities Act's exemptions from registration. Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws.

They defined a "meme coin" as a type of crypto asset inspired by internet memes, characters, current events, or trends.

On that same day, SEC Commissioner Caroline A. Crenshaw published her response, stating that "The purpose of written guidance from SEC staff is to promote understanding of, and compliance with, the federal securities laws. Today's guidance from the Division of Corporation Finance turns that concept on its head. It advances an incomplete, unsupported view of the law to suggest that an entire product category is outside the bounds of SEC jurisdiction."

• The staff statement is HERE
• Commissioner Crenshaw’s statement is HERE