SEC Excludes Meme Coins From Securities Regulation

On By admincoin

On May 19, 2025, SEC Commissioner Hester Peirce declared that most meme coins, including $TRUMP, wonโ€™t be treated as securities, excluding them from federal securities laws oversight.

This statement by SEC affects the perceived risk level of meme coins, potentially increasing volatility and investor caution, as these tokens now lack federal protections against market losses.

SEC Clarifies Meme Coins Lack Securities Status

Hester Peirce, known as โ€œCrypto Mom,โ€ articulated the SECโ€™s stance that most meme coins are not securities. Her remarks align with the Division of Corporation Financeโ€™s clarifications in February 2025.

โ€œMany of the memecoins on the market are not securities.โ€ โ€” Hester Peirce, Commissioner, U.S. Securities and Exchange Commission (SEC)

The SEC indicates meme coins have โ€œlimited or no use or functionalityโ€; thus, they donโ€™t meet the Howey Test for securities. This new guidance could signal a reduced regulatory focus on meme tokens.

Meme Coins Face Increased Investment Risks

Meme coins such as $TRUMP are now seen as unprotected investments, heightening the risk and volatility for investors. Absence of SEC oversight could lead to price instability prompted by market sentiment shifts.

Regulatory ambiguity in past events, like the 2017 ICO wave, resulted in major losses. The SECโ€™s present stance delineates meme coins from securities, potentially changing investment strategies in these tokens.

SEC Decision Contrasts 2017 ICO Regulation

Contrast this SEC decision against the 2017 ICO landscape, where many offerings were later classified as securities. This distinct departure reflects a nuanced regulatory view, focusing on actual utility.

Experts, including Kanalcoin analysts, suggest this decision might spur innovation in meme coin utility. Past data shows regulatory clarity often influences market confidence and participant behavior.

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