SEC Clarifies: Meme Coins Not Securities, Crypto Exchanges Surge

The U.S. Securities and Exchange Commission (SEC) has clarified its stance on meme coins, stating that these digital assets are not considered securities and are more akin to collectibles. This announcement comes as a relief to the crypto community, which has been eagerly awaiting regulatory clarity on the matter.

The SEC's guidance, released on February 27, 2025, emphasizes that meme coins, such as TRUMP and other popular tokens, do not meet the legal definition of securities under the Securities Act of 1933. Unlike stocks or investment contracts, meme coins do not grant holders any rights to future profits, income, or ownership in a company. As a result, the SEC does not require meme coin creators or traders to register with them, exempting them from the same rules as traditional investments.

However, the SEC's decision to not regulate meme coins as securities also means that investors will not receive the usual protections from the agency. This exposes them to the risk of fraud, pump-dump schemes, and misleading advertising. Legal experts, such as Khurram Dara of Bain Capital Crypto, have highlighted that while the SEC may not directly regulate meme coins, other federal or state agencies could take action against deceptive practices to protect investors.

Prior to the SEC's statement, House Democrats had been pushing the Modern Emoluments and Malfeasance Enforcement (MEME) Act. This bill aims to restrict public officials from launching or endorsing meme coins, particularly in response to Donald Trump's controversial "TRUMP" meme coin. Lawmakers fear that such tokens could be exploited for personal or political gain, raising ethical concerns.

The crypto community has reacted to the SEC's stance with mixed feelings. Some industry players view it as a positive move, believing that regulatory clarity will encourage more investment in meme coins, particularly on US-based blockchains like Solana. Crypto lawyer Ishmael Green noted that with meme coins officially outside securities laws, exchanges like Coinbase and Robinhood may feel more confident listing them, which could lead to a surge in market activity. Following the announcement, shares of major crypto exchanges saw a slight uptick, reflecting optimism within the industry.

In a surprising turn, the SEC has decided to drop its lawsuits against Coinbase, Consensys, and Gemini, signaling a positive change for crypto assets. As the MEME Act looms and the