news 
SEC Division’s New Stance on Memecoins Marks Major Change in Cryptocurrency Regulation
In a significant shift in regulatory approach, the Securities and Exchange Commission (SEC) has announced that memecoins do not qualify as securities under federal law. This decision marks a major change in cryptocurrency regulation, with far-reaching implications for the crypto market.
The SEC’s Division of Corporation Finance made this declaration on February 27, stating that memecoins lack the key characteristics required to classify them as securities. According to the commission, these digital assets are primarily bought for cultural purposes rather than investment goals. This stance is a departure from previous regulatory approaches under former chair Gary Gensler.
The decision emphasizes that memecoins do not involve pooled investments, nor do they have a central team collecting funds to develop a business venture. Instead, market demand and speculation drive their prices, rather than the performance of a company or investment strategy. This key distinction sets them apart from traditional securities.
While memecoins will no longer require registration with the SEC, the agency has warned that fraudulent activities could still face enforcement from other regulators. The commission emphasized that projects attempting to disguise securities as memecoins will be scrutinized and potentially penalized for failing to disclose material information or engage in deceptive practices.
This shift in stance comes amid broader changes in crypto regulation under the Trump administration. Recent developments include the SEC dropping several crypto-related lawsuits initiated during the Biden era, indicating a more lenient approach to the industry.
High-profile individuals such as former President Donald Trump and Argentina’s President Javier Milei have been involved with memecoin promotions, which may have contributed to increased scrutiny of these digital assets. However, this development could also open up new opportunities for creators and investors in the space.
It remains to be seen how this decision will impact the broader crypto market and the role of memecoins within it.
