SEC Qualification: Meme Coin does not belong to securities, investors are at their own risk

PANews reported on February 28 that the U.S. Securities and Exchange Commission (SEC) Corporate Financing Supervision Department issued guidance on memecoins, saying that Memecoins usually do not comply with the definition of securities laws and are not regulated by the federal securities laws. The SEC believes that Meme coins are mainly used for entertainment, social and cultural purposes, and their value is driven by market demand and speculation, similar to collectibles, and often lack practical uses or functions. Therefore, the purchase and sale of Meme coins does not involve the issuance or sale of securities under the Securities Act, and there is no registration or the registration exemption is required.

The SEC cites Howey testing standards, pointing out that Meme currency transactions do not involve investing in companies, and there are no reasonable expectations to profit from other people's management efforts. The price of Meme coins is mainly determined by market speculation, rather than the issuer's management or business activities. However, the SEC warns that if certain Meme coins actually constitute securities or involve fraud, they may face enforcement actions by other federal or state laws.