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  • Debashree Patra
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    Fun-loving and cheerful, a passionate blockchain and crypto writer who knows no boundaryโ€ฆconnect if you share the same passion. With 10+ years of writing experience, I am a Crypto Journalist by chance, exploring, and learning all the dynamics of the sci-fi action-filled crypto world. Currently, focusing on cryptocurrency news and price data. With a passion for research and challenging my capabilities, I am slowly getting into the crypto arena to bring new insights every day.

    • 2 minutes read

    SEC Declares Meme Coins Are Not Securities: What It Means for Crypto Investors

    Story Highlights
    • Meme coins are classified as collectibles, not securities, by the SEC, meaning they avoid strict investment regulations.

    • While not regulated as securities, meme coin fraud and scams will still face legal action.

    • The SEC is showing a shift towards a more favorable stance on crypto, including dropping some lawsuits and clarifying meme coin regulation.

    The U.S. Securities and Exchange Commission (SEC) is changing its stance on crypto, and this time, itโ€™s a win for meme coins. In a surprising move, the agency has declared that meme coins like TRUMP and other popular tokens are not securities. That means they wonโ€™t face the same strict financial regulations as stocks or investment contracts. Instead, the SEC sees them as collectibles – bought for fun rather than serious financial gains.

    But before you think meme coins are in the clear, thereโ€™s a catch. While they might not be treated like traditional investments, that doesnโ€™t mean scammers get a free pass. The SEC has made it clear – fraud, deception, and misleading schemes will still land people in legal trouble.

    Letโ€™s break it down.

    SEC: Meme Coins Are Not Investments

    According to the SECโ€™s latest statement, meme coins donโ€™t meet the legal definition of securities under the Securities Act of 1933. Unlike stocks or investment contracts, they donโ€™t give holders rights to future profits, income, or company ownership. Because of this, meme coin creators and traders donโ€™t have to register with the SEC or follow the same rules as traditional investments.

    But this also means investors donโ€™t get SEC protections. Without oversight, theyโ€™re more exposed to fraud, pump-and-dump schemes, and misleading marketing.

    Could Other Agencies Step In?

    Legal experts, including Bain Capital Cryptoโ€™s Khurram Dara, believe that while the SEC wonโ€™t regulate meme coins directly, other federal or state agencies could still take action against deceptive practices. So while meme coins escape securities laws, they wonโ€™t be completely unregulated.

    The MEME Act: Lawmakers Want Restrictions

    The SECโ€™s statement comes as House Democrats push for the Modern Emoluments and Malfeasance Enforcement (MEME) Act. Led by California Representative Sam Liccardo, the bill aims to ban public officials from launching or endorsing meme coins. This follows the controversy around Donald Trumpโ€™s โ€œTRUMPโ€ meme coin, which saw a sharp rise and fall in value. Lawmakers worry these tokens could be misused for personal or political gain, raising ethical concerns.

    Crypto Community Reacts

    The SECโ€™s decision has sparked mixed reactions in the crypto space. Some industry players see it as a positive step, arguing that clearer rules will bring more investment into meme coins, especially on U.S.-based blockchains like Solana.

    Crypto lawyer Ishmael Green pointed out that since meme coins are officially not securities, exchanges like Coinbase and Robinhood may feel more comfortable listing themโ€”potentially boosting trading activity. Following the SECโ€™s announcement, shares of major crypto exchanges saw a small uptick, reflecting growing optimism.

    A Turning Point for Crypto!

    In another unexpected move, the SEC is dropping its lawsuits against Coinbase, Consensys, and Gemini. This signals a major shift in its approach to crypto assets, suggesting a friendlier regulatory environment.

    With the MEME Act on the table and the SEC adjusting its stance, the crypto industry – especially meme coins – is in for big changes. Whether this brings more clarity or more confusion remains to be seen.

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