On February 27, 2025, the U.S. Securities and Exchange Commission (SEC) announced that memecoins—digital assets inspired by popular memes—are not classified as securities under federal law. The SEC’s declaration states that these tokens are considered collectibles rather than financial instruments.

According to the SEC statement,
memecoins do not constitute financial securities because they fail to generate yield or provide rights to future income or asset ownership. “Memecoins are typically acquired for entertainment and cultural purposes, with value driven by market demand and speculation,” the SEC explained.

WOW.
The SEC just said that meme coins are generally NOT considered securities under US federal law.
They also stated that meme coins have limited or no use and don’t need to be registered with the SEC.
This is a MASSIVE statement from the SEC. pic.twitter.com/7KpB2c2481
— The Kobeissi Letter (@KobeissiLetter) February 27, 2025

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Exemption From Federal Securities Law

The SEC clarified that while memecoins may not be classified as securities, fraudulent schemes involving these tokens could still trigger enforcement actions. If any assets labeled as memecoins are found to evade securities laws or mislead investors, action will be taken.
Memecoins generally lack utility, primarily relying on market speculation. Transactions involving these tokens are exempt from registration under the Securities Act of 1933, allowing creators and traders to bypass strict financial regulations typically applied to securities.

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Should Presidential Memecoins Be Banned?

Simultaneously, Sam Liccardo, a California Democrat, has proposed a legislation titled MEME ACT or the Modern Emoluments and Malfeasance Enforcement Act, questioning the ethics of Presidential memecoins, specifically targeting President’s $TRUMP coin and First Lady’s $MELANIA coin.
“That behavior is inherently unethical, raising questions about the absence of a proper prohibition,” he remarked, adding that Trump’s memecoin raises concerns regarding transparency and insider trading.
Liccardo’s proposed legislation aims to prevent the president, members of Congress, and senior officials from issuing or supporting securities, commodities, or cryptocurrencies like memecoins.

Today, I introduced the MEME Act, which prohibits top federal officials from issuing, sponsoring, or promoting securities, commodities, or digital assets with criminal and civil penalties. pic.twitter.com/NbjmcwoEB5
— Rep. Sam Liccardo (@RepLiccardo) February 27, 2025

Key Takeaways

• The announcement has sparked a surge in memecoin prices. Popular tokens such as Dogecoin (DOGE) and Shiba Inu (SHIB) witnessed significant gains shortly after the news, with increased trading volumes.
• The SEC’s decision marks a crucial development in cryptocurrency regulation in the United States.