SEC Declares Memecoins Are Not Securities, Citing Limited Functionality

1 min

The U.S. Securities and Exchange Commission (SEC) has clarified its stance on memecoins, categorizing them as collectibles rather than securities. Key points include:

Memecoins are defined as crypto assets inspired by internet memes or trends aimed at attracting online communities.
According to the SEC, they do not meet the security definition under the Howey Test due to limited or no functionality.
This clarification aligns with previous comments from Commissioner Hester Peirce, head of the SEC's Crypto Task Force.
Peirce emphasized that investors should conduct their own due diligence when purchasing such tokens.
The SEC retains enforcement powers if memecoins are used to circumvent securities laws.
The staff statement is not an official rule or regulation approved by the commission.

The SEC continues to monitor the crypto landscape while encouraging individual responsibility among investors.