Overview of New SEC Rules on Memecoins

Here’s a con­cise overview of the SEC’s new rules on meme­coins, as ref­er­enced in Car­o­line Crenshaw’s crit­i­cism:

On Feb­ru­ary 27, 2025, the SEC’s Divi­sion of Cor­po­ra­tion Finance issued a staff state­ment titled “Staff State­ment on Meme Coins: What Does it Meme?” This guid­ance out­lined that most memecoins—cryptocurrencies root­ed in inter­net cul­ture or social trends, like those tied to Don­ald Trump’s inauguration—are not con­sid­ered secu­ri­ties under U.S. fed­er­al law. The key points of the SEC’s new stance are:

1. Non-Secu­ri­ty Clas­si­fi­ca­tion: Meme­coins are gen­er­al­ly viewed as lack­ing the char­ac­ter­is­tics of an invest­ment con­tract under the Howey Test. They don’t typ­i­cal­ly involve an expec­ta­tion of prof­its from the efforts of oth­ers but are instead dri­ven by com­mu­ni­ty engage­ment or nov­el­ty, akin to col­lectibles or com­modi­ties.
2. Lim­it­ed Reg­u­la­to­ry Over­sight: By clas­si­fy­ing most meme­coins as non-secu­ri­ties, the SEC has shift­ed pri­ma­ry reg­u­la­to­ry respon­si­bil­i­ty away from itself to oth­er agen­cies, like the Com­mod­i­ty Futures Trad­ing Com­mis­sion (CFTC), or left them large­ly unreg­u­lat­ed if they don’t involve fraud or oth­er vio­la­tions.
3. Case-by-Case Excep­tions: The guid­ance notes that some meme­coins could still be secu­ri­ties if their issuance, mar­ket­ing, or eco­nom­ic real­i­ty sug­gests an invest­ment scheme (e.g., coor­di­nat­ed efforts by pro­mot­ers to dri­ve prof­it). How­ev­er, it sets a high bar for such deter­mi­na­tions, favor­ing a light-touch approach.
4. No Reg­is­tra­tion Required: Issuers of meme­coins deemed non-secu­ri­ties aren’t required to reg­is­ter with the SEC or com­ply with dis­clo­sure rules, a depar­ture from stricter over­sight applied to tokens in past enforce­ment actions.

This shift reflects a broad­er pol­i­cy piv­ot under incom­ing SEC lead­er­ship aligned with Trump’s pro-cryp­to agen­da, con­trast­ing with the Gensler era’s aggres­sive stance. Crenshaw’s dis­sent, call­ing it a “roadmap for dodg­ing reg­u­la­tion,” high­lights her con­cern that this vague­ness lets issuers exploit the “meme­coin” label to avoid account­abil­i­ty, even for tokens with secu­ri­ty-like traits. The rules aim to fos­ter inno­va­tion but have sparked debate over investor pro­tec­tion, espe­cial­ly for high-pro­file cas­es like Trump meme­coins.

SEC News­room