The US Securities and Exchange Commission (SEC) has ruled that meme coins are not subject to federal securities regulations. The ruling applies to tokens such as the one promoted by former President Donald Trump, which was valued at over $74 before falling to around $12.
Meme coins are considered “collectibles” and their value is driven primarily by market demand and speculation, rather than an offer and sale of securities. This means that individuals who participate in the purchase or sale of meme coins do not need to register with the SEC or follow specific regulations.
The decision comes after Trump launched his own meme coin just before his inauguration. The announcement also coincides with a plan by House Democrats to introduce legislation that would prohibit elected officials and their families from profiting from personal meme coins. The proposed bill, known as the Modern Emoluments and Malfeasance Enforcement (MEME) Act, aims to prevent insider trading and foreign influence over the Executive Branch.
The SEC’s ruling is seen as a significant development in the crypto industry, which has long been subject to regulatory uncertainty. As meme coins continue to gain popularity, this decision provides clarity for investors and operators alike.
Source: https://abcnews.go.com/Business/sec-meme-coins-subject-securities-regulations/story?id=119275905