SEC Clarifies That Meme Coins Are Not Securities Under Federal Law

On February 27, 2025, the SEC clarified that meme coins—crypto assets inspired by internet trends—are not considered securities under federal law. The SEC's Division of Corporation Finance stated that meme coins do not meet the criteria of “investment contracts” because their value is driven by speculative trading and sentiment, not the efforts of others, as outlined by the Howey test.

This means meme coins don’t require registration under the Securities Act of 1933. However, fraudulent activity involving meme coins could still be subject to enforcement. Each case may require further evaluation if a coin differs from these characteristics.